Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2021 | Aug. 02, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2021 | |
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 Layton Avenue | |
Entity Address, Address Line Two | l2th 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, $0.001 par value per share | |
Trading Symbol | MODV | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 13,993,060 | |
Entity Central Index Key | 0001220754 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q2 | |
Amendment Flag | false |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 290,909 | $ 183,281 |
Accounts receivable, net of allowance of $527 and $2,403, respectively | 226,973 | 197,943 |
Other receivables | 12,706 | 12,674 |
Prepaid expenses and other current assets | 26,274 | 31,885 |
Restricted cash | 19 | 75 |
Current assets of discontinued operations | 141 | 758 |
Total current assets | 557,022 | 426,616 |
Operating lease right-of-use assets | 45,791 | 30,928 |
Property and equipment, net | 30,268 | 27,544 |
Goodwill | 448,760 | 444,927 |
Intangible assets, net | 327,012 | 345,652 |
Equity investment | 141,163 | 137,466 |
Other assets | 26,182 | 12,780 |
Total assets | 1,576,198 | 1,425,913 |
Current liabilities: | ||
Accounts payable | 16,253 | 8,464 |
Accrued contract payables | 296,717 | 101,705 |
Accrued expenses and other current liabilities | 109,143 | 117,010 |
Accrued transportation costs | 88,615 | 79,674 |
Current portion of operating lease liabilities | 8,665 | 8,277 |
Self-funded insurance programs | 5,958 | 4,727 |
Deferred revenue | 2,370 | 2,923 |
Current liabilities of discontinued operations | 1,527 | 1,971 |
Total current liabilities | 529,248 | 324,751 |
Long-term debt, net of deferred financing costs of $12,570 and $14,020, respectively | 487,430 | 485,980 |
Deferred tax liabilities | 89,352 | 92,195 |
Operating lease liabilities, less current portion | 32,531 | 23,437 |
Long-term contract payables | 2,292 | 72,183 |
Other long-term liabilities | 26,088 | 15,756 |
Total liabilities | 1,166,941 | 1,014,302 |
Commitments and contingencies (Note 14) | ||
Stockholders’ equity | ||
Common stock: Authorized 40,000,000 shares; $0.001 par value; 19,569,045 and 19,570,598, respectively, issued and outstanding (including treasury shares) | 20 | 20 |
Additional paid-in capital | 426,312 | 421,318 |
Retained earnings | 250,926 | 218,414 |
Treasury shares, at cost, 5,561,657 and 5,287,283 shares, respectively | (268,001) | (228,141) |
Total stockholders’ equity | 409,257 | 411,611 |
Total liabilities and stockholders’ equity | $ 1,576,198 | $ 1,425,913 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts | $ 527 | $ 2,403 |
Deferred financing fees | $ 12,570 | $ 14,020 |
Common stock, shares authorized | 40,000,000 | 40,000,000 |
Common stock, par (in USD per share) | $ 0.001 | $ 0.001 |
Common stock, shares, issued | 19,569,045 | 19,570,598 |
Common stock, shares, outstanding | 19,569,045 | 19,570,598 |
Treasury stock, shares | 5,561,657 | 5,287,283 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Income Statement [Abstract] | ||||
Service revenue, net | $ 474,448 | $ 282,256 | $ 928,058 | $ 649,547 |
Grant income (Note 2) | 852 | 0 | 3,500 | 0 |
Operating expenses: | ||||
Service expense | 379,566 | 196,106 | 739,898 | 528,767 |
General and administrative expense | 56,347 | 31,199 | 111,217 | 51,994 |
Depreciation and amortization | 11,819 | 6,108 | 24,059 | 9,898 |
Total operating expenses | 447,732 | 233,413 | 875,174 | 590,659 |
Operating income | 27,568 | 48,843 | 56,384 | 58,888 |
Other expenses (income): | ||||
Interest expense, net | 8,287 | 1,498 | 16,710 | 1,739 |
Equity in net income of investee | (267) | (4,425) | (4,770) | (1,875) |
Income from continuing operations before income taxes | 19,548 | 51,770 | 44,444 | 59,024 |
Provision for income taxes | 5,791 | 14,471 | 11,807 | 5,425 |
Income from continuing operations, net of tax | 13,757 | 37,299 | 32,637 | 53,599 |
Loss from discontinued operations, net of tax | (85) | (301) | (124) | (503) |
Net income | 13,672 | 36,998 | 32,513 | 53,096 |
Net income (loss) available to common stockholders (Note 12) | $ 13,672 | $ (12,819) | $ 32,513 | $ 1,920 |
Basic earnings (loss) per common share: | ||||
Continuing operations (in dollars per share) | $ 0.98 | $ (0.96) | $ 2.31 | $ 0.19 |
Discontinued operations (in dollars per share) | (0.01) | (0.02) | (0.01) | (0.04) |
Basic earnings (loss) per common share (in dollars per share) | 0.97 | (0.98) | 2.30 | 0.15 |
Diluted earnings (loss) per common share: | ||||
Continuing operations (in dollars per share) | 0.97 | (0.96) | 2.28 | 0.19 |
Discontinued operations (in dollars per share) | (0.01) | (0.02) | (0.01) | (0.04) |
Diluted earnings (loss) per common share (in dollars per share) | $ 0.96 | $ (0.98) | $ 2.27 | $ 0.15 |
Weighted-average number of common shares outstanding: | ||||
Basic (in shares) | 14,025,325 | 13,077,596 | 14,151,946 | 13,032,931 |
Diluted (in shares) | 14,175,594 | 13,077,596 | 14,329,794 | 13,059,699 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2021 | Jun. 30, 2020 | |
Operating activities | ||
Net income | $ 32,513 | $ 53,096 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 5,409 | 4,564 |
Amortization | 18,650 | 5,334 |
Provision for doubtful accounts | (1,875) | 2,229 |
Stock-based compensation | 2,659 | 1,772 |
Deferred income taxes | (2,843) | 11,441 |
Amortization of deferred financing costs and debt discount | 1,739 | 136 |
Equity in net income of investee | (4,770) | (1,875) |
Reduction of right-of-use assets | 7,341 | 4,373 |
Loss on disposal of assets | 0 | 216 |
Changes in operating assets and liabilities, net of effects of acquisitions: | ||
Accounts receivable and other receivables | (26,113) | 8,206 |
Prepaid expenses and other assets | (6,943) | (13,119) |
Income tax refunds on sale of business | 10,863 | 173 |
Self-funded insurance programs | 1,231 | 615 |
Accrued contract payables | 125,120 | 78,891 |
Accounts payable and accrued expenses | 134 | (2,487) |
Accrued transportation costs | 8,941 | (3,010) |
Deferred revenue | (553) | 462 |
Other long-term liabilities | (2,390) | (3,829) |
Net cash provided by operating activities | 169,113 | 147,188 |
Investing activities | ||
Purchase of property and equipment | (8,132) | (2,330) |
Acquisition, net of cash acquired | (15,843) | (77,665) |
Net cash used in investing activities | (23,975) | (79,995) |
Financing activities | ||
Proceeds from debt | 0 | 162,000 |
Repayment of debt | 0 | (162,000) |
Preferred stock redemption payment | 0 | (82,769) |
Preferred stock dividends | 0 | (1,961) |
Repurchase of common stock, for treasury | (39,040) | (10,186) |
Proceeds from common stock issued pursuant to stock option exercise | 2,335 | 11,329 |
Restricted stock surrendered for employee tax payment | (820) | (37) |
Other financing activities | (41) | (154) |
Net cash used in financing activities | (37,566) | (83,778) |
Net change in cash, cash equivalents and restricted cash | 107,572 | (16,585) |
Cash, cash equivalents and restricted cash at beginning of period | 183,356 | 61,673 |
Cash, cash equivalents and restricted cash at end of period | 290,928 | 45,088 |
Supplemental cash flow information | ||
Cash paid for interest | 16,207 | 1,669 |
Cash paid for income taxes, net of refunds | 5,238 | 1,967 |
Assets acquired under operating leases | $ 22,204 | $ 4,144 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Total | Preferred Stock Conversion Agreement | Common Stock | Common StockPreferred Stock Conversion Agreement | Additional Paid-in Capital | Additional Paid-in CapitalPreferred Stock Conversion Agreement | Retained Earnings | Retained EarningsPreferred Stock Conversion Agreement | Treasury Stock | |
Beginning Balance (in shares) at Dec. 31, 2019 | 18,073,763 | 5,088,782 | ||||||||
Beginning Balance at Dec. 31, 2019 | $ 317,592 | $ 18 | $ 351,529 | $ 183,733 | $ (217,688) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 16,098 | 16,098 | ||||||||
Stock-based compensation | 1,005 | 1,005 | ||||||||
Exercise of employee stock options (in shares) | 39,111 | |||||||||
Exercise of employee stock options | 2,054 | 2,054 | ||||||||
Restricted stock issued (in shares) | 79,029 | 626 | ||||||||
Restricted stock issued | (37) | $ (37) | ||||||||
Shares issued for bonus settlement and director stipends | 701 | |||||||||
Shares issued for bonus settlement and director stipends | 38 | 38 | ||||||||
Stock repurchase plan (in shares) | 142,821 | |||||||||
Stock repurchase plan | (7,299) | $ (7,299) | ||||||||
Conversion of convertible preferred stock to common stock (in shares) | 40 | |||||||||
Conversion of convertible preferred stock to common stock | 2 | 2 | ||||||||
Convertible preferred stock dividends | [1] | (1,095) | (1,095) | |||||||
Ending Balance (in shares) at Mar. 31, 2020 | 18,192,644 | 5,232,229 | ||||||||
Ending Balance at Mar. 31, 2020 | 328,358 | $ 18 | 354,628 | 198,736 | $ (225,024) | |||||
Beginning Balance (in shares) at Dec. 31, 2019 | 18,073,763 | 5,088,782 | ||||||||
Beginning Balance at Dec. 31, 2019 | 317,592 | $ 18 | 351,529 | 183,733 | $ (217,688) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 53,096 | |||||||||
Ending Balance (in shares) at Jun. 30, 2020 | 19,254,090 | 5,285,085 | ||||||||
Ending Balance at Jun. 30, 2020 | 360,458 | $ 19 | 402,433 | 185,917 | $ (227,911) | |||||
Beginning Balance (in shares) at Mar. 31, 2020 | 18,192,644 | 5,232,229 | ||||||||
Beginning Balance at Mar. 31, 2020 | 328,358 | $ 18 | 354,628 | 198,736 | $ (225,024) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 36,998 | 36,998 | ||||||||
Stock-based compensation | 691 | 691 | ||||||||
Exercise of employee stock options (in shares) | 129,722 | |||||||||
Exercise of employee stock options | 9,275 | 9,275 | ||||||||
Restricted stock forfeited | (8,496) | |||||||||
Shares issued for bonus settlement and director stipends | 487 | |||||||||
Shares issued for bonus settlement and director stipends | 38 | 38 | ||||||||
Stock repurchase plan (in shares) | 52,856 | |||||||||
Stock repurchase plan | (2,887) | $ (2,887) | ||||||||
Conversion of convertible preferred stock to common stock (in shares) | 14,166 | 925,567 | ||||||||
Conversion of convertible preferred stock to common stock | 546 | $ 31,259 | $ 1 | 546 | $ 37,255 | $ (5,997) | ||||
Redemption of convertible preferred stock | (42,954) | (42,954) | ||||||||
Convertible preferred stock dividends | (866) | (866) | ||||||||
Ending Balance (in shares) at Jun. 30, 2020 | 19,254,090 | 5,285,085 | ||||||||
Ending Balance at Jun. 30, 2020 | 360,458 | $ 19 | 402,433 | 185,917 | $ (227,911) | |||||
Beginning Balance (in shares) at Dec. 31, 2020 | 19,570,598 | 5,287,283 | ||||||||
Beginning Balance at Dec. 31, 2020 | 411,611 | $ 20 | 421,318 | 218,414 | $ (228,141) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 18,840 | 18,840 | ||||||||
Stock-based compensation | 1,149 | 1,149 | ||||||||
Exercise of employee stock options (in shares) | 36,338 | |||||||||
Exercise of employee stock options | 2,286 | 2,286 | ||||||||
Restricted stock issued (in shares) | 15,821 | |||||||||
Restricted stock surrendered for employee tax payment (in shares) | 4,253 | |||||||||
Restricted stock surrendered for employee tax payment | (721) | $ (721) | ||||||||
Shares issued for bonus settlement and director stipends | 260 | |||||||||
Shares issued for bonus settlement and director stipends | 38 | 38 | ||||||||
Stock repurchase plan (in shares) | 94,235 | |||||||||
Stock repurchase plan | (14,450) | $ (14,450) | ||||||||
Ending Balance (in shares) at Mar. 31, 2021 | 19,623,017 | 5,385,771 | ||||||||
Ending Balance at Mar. 31, 2021 | 418,753 | $ 20 | 424,791 | 237,254 | $ (243,312) | |||||
Beginning Balance (in shares) at Dec. 31, 2020 | 19,570,598 | 5,287,283 | ||||||||
Beginning Balance at Dec. 31, 2020 | 411,611 | $ 20 | 421,318 | 218,414 | $ (228,141) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 32,513 | |||||||||
Ending Balance (in shares) at Jun. 30, 2021 | 19,569,045 | 5,561,657 | ||||||||
Ending Balance at Jun. 30, 2021 | 409,257 | $ 20 | 426,312 | 250,926 | $ (268,001) | |||||
Beginning Balance (in shares) at Mar. 31, 2021 | 19,623,017 | 5,385,771 | ||||||||
Beginning Balance at Mar. 31, 2021 | 418,753 | $ 20 | 424,791 | 237,254 | $ (243,312) | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Net income | 13,672 | 13,672 | ||||||||
Stock-based compensation | 1,416 | 1,416 | ||||||||
Exercise of employee stock options (in shares) | 866 | |||||||||
Exercise of employee stock options | 49 | 49 | ||||||||
Restricted stock forfeited | (55,162) | |||||||||
Restricted stock surrendered for employee tax payment (in shares) | 713 | |||||||||
Restricted stock surrendered for employee tax payment | (99) | $ (99) | ||||||||
Shares issued for bonus settlement and director stipends | 324 | |||||||||
Shares issued for bonus settlement and director stipends | 56 | 56 | ||||||||
Stock repurchase plan (in shares) | 175,173 | |||||||||
Stock repurchase plan | (24,590) | $ (24,590) | ||||||||
Ending Balance (in shares) at Jun. 30, 2021 | 19,569,045 | 5,561,657 | ||||||||
Ending Balance at Jun. 30, 2021 | $ 409,257 | $ 20 | $ 426,312 | $ 250,926 | $ (268,001) | |||||
[1] | Cash dividends on redeemable convertible preferred stock of $1.37 per share were distributed to convertible preferred stockholders for the three months ended March 31, 2020 and June 30, 2020. |
Unaudited Condensed Consolida_6
Unaudited Condensed Consolidated Statements of Stockholders' Equity (Parenthetical) - $ / shares | 3 Months Ended | |
Jun. 30, 2020 | Mar. 31, 2020 | |
Statement of Stockholders' Equity [Abstract] | ||
Preferred stock, dividends per share (in USD per share) | $ 1.37 | $ 1.37 |
Organization and Basis of Prese
Organization and Basis of Presentation | 6 Months Ended |
Jun. 30, 2021 | |
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 patients. Its value-based solutions address the social determinants of health, or SDoH, enable greater access to care, reduce costs, and improve outcomes. ModivCare is a provider of non-emergency medical transportation, or NEMT, and personal care. The technology-enabled operating model includes NEMT core competencies in risk underwriting, contact center management, network credentialing, claims management and non-emergency medical transport 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, including senior citizens and disabled adults. ModivCare is further expanding its offerings to include nutritional meal delivery and partners with communities throughout the country, providing food-insecure individuals delivery of nutritional meals. ModivCare’s solutions help health plans manage risks, close care gaps, reduce costs, and connect members to care. Through the combination of its historical NEMT business with its in-home personal care business that was previously operated by Simplura Health Group, or Simplura, as described further below, ModivCare has united two complementary healthcare companies that serve similar, highly vulnerable patient populations. On May 6, 2020, ModivCare entered into an Equity Purchase Agreement (the “Purchase Agreement”) with Specialty Benefits, LLC., a Delaware corporation (the “Seller”), National MedTrans, LLC, a New York limited liability company (“NMT”), and for limited purposes therein, United Healthcare Services, Inc., a Minnesota corporation. NMT provides non-emergency medical transportation services under contractual relationships. Pursuant to the terms of the Purchase Agreement, ModivCare acquired all of the outstanding capital stock of NMT. On November 18, 2020, ModivCare acquired all of the outstanding equity of OEP AM, Inc., a Delaware corporation doing business as Simplura Health Group, which formed the foundation of our personal care business and Personal Care Segment operations. On May 6, 2021, ModivCare completed the acquisition of WellRyde software from nuVizz, Inc., a technology provider of Advanced Transportation Management Systems (ATMS) software enabling routing, automated trip assignments and real-time network monitoring. See Note 3, Acquisitions, for further information. ModivCare also holds a 43.6% minority interest in CCHN Group Holdings, Inc. and its subsidiaries, which operates under the Matrix Medical Network brand and which we refer to as “Matrix”. Matrix 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. Matrix’s Clinical Care provides risk adjustment solutions that improve health outcomes for individuals and financial performance for health plans. Matrix’s Clinical Solutions provides employee health and wellness services focused on improving employee health with worksite certification solutions that reinforce business resilience and safe return-to-work outcomes. Its Clinical Solutions offerings also provide clinical trial services which support the delivery of safe and effective clinical trial operations to patients and eligible volunteers. Basis of Presentation The Company follows accounting standards set 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 and six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021. 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 condensed consolidated financial statements. The condensed consolidated balance sheet at December 31, 2020 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, 2020. The Company accounts for its investment in Matrix using the equity method, as the Company does not control the decision-making process or business management practices of Matrix. While the Company has access to certain information and performs certain procedures to review the reasonableness of information, the Company relies on the management of Matrix to provide accurate financial information prepared in accordance with GAAP. The Company receives audit reports relating to such financial information from Matrix’s independent auditors on an annual basis. The Company is not aware of any errors in or possible misstatements of the financial information provided by Matrix that would have a material effect on the Company’s consolidated financial statements. See Note 7, Equity Investment , for further information. Impact of the COVID-19 Pandemic During 2020 and 2021, the COVID-19 pandemic impacted the Company’s business, as well as its patients, communities, and employees. The Company’s priorities during the COVID-19 pandemic remain protecting the health and safety of its employees, maximizing the availability of its services and products to support the SDoH, and the operational and financial stability of its business. |
Significant Accounting Policies
Significant Accounting Policies and Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2021 | |
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. Grant Income In the six months ended June 30, 2021, the Company received distributions from the CARES Act PRF of approximately $3.5 million targeted to offset lost revenue and expenditures incurred in connection with the COVID-19 pandemic. The PRF payments are subject to certain restrictions and are subject to recoupment if not used for designated purposes. As a condition to receiving distributions, providers must agree to certain terms and conditions, including, among other things, that the funds are being used for lost revenues and unreimbursed COVID-19 related expenses 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 recognizes grant payments as grant income when there is reasonable assurance that it has complied with the conditions associated with the grant. Grant income recognized by the Company is presented in grant income in the accompanying condensed consolidated statements of operations. HHS guidance related to PRF grant funds is still evolving and subject to change. The Company is continuing to monitor the reporting requirements as they evolve. CARES Act Payroll Deferral The CARES Act also provides for certain federal income and other tax changes, including the deferral of the employer portion of Social Security payroll taxes. The Company has deferred payment of approximately $20.8 million related to the deferral of employer payroll taxes as of June 30, 2021 under the CARES Act. Of this amount, approximately 50% is due in December of 2021 and 50% is due in December of 2022; therefore, $10.4 million is recorded in accrued expenses, and $10.4 million is recorded in other long-term liabilities. Recent Accounting Pronouncements The Company adopted the following accounting pronouncements during the six months ended June 30, 2021: In January 2020, the FASB issued ASU 2020-01, Clarifying the Interactions Between Topic 321, Topic 323, and Topic 815 ("ASU 2020-01"), to clarify the interaction among the accounting standards for equity securities, equity method investments and certain derivatives. ASU 2020-01 is effective for public business entities for fiscal years beginning after December 15, 2020, including interim periods therein. There was no material impact to the financial statements from the adoption of this ASU. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). The ASU removes certain exceptions to the general principles in ASC 740, Income Taxes , and also clarifies and amends existing guidance to reduce complexity in accounting for income taxes. The ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within that fiscal year, with early adoption permitted. There was no material impact to the financial statements from the adoption of this ASU. Recent accounting pronouncements that the Company has yet to adopt are as follows: In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04") which provides optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued due to reference rate reform. The relief granted in ASC 848, Reference Rate Reform ("ASC 848"), is applicable only to legacy contracts if the amendments made to the agreements are solely for reference rate reform activities. The provisions of ASC 848 must be applied for all transactions other than derivatives, which may be applied at a hedging relationship level. Entities may apply the provisions as of the beginning of the reporting period when the election is made (i.e. as early as the first quarter 2020). Unlike other topics, the provisions of this update are only available until December 31, 2022, when the reference rate replacement activity is expected to be completed. The Company is currently evaluating the impact ASU 2020-04 will have on its consolidated financial statements or disclosures; however, does not expect the adoption to have a material impact. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40) ("ASU 2020-06") which addresses the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity. The update limits the accounting models for convertible instruments resulting in fewer embedded conversion features being separately recognized from the host contract. Specifically, ASU 2020-06 removes from GAAP the separation models for convertible debt with a cash conversion feature and convertible instruments with a beneficial conversion feature. As a result, after adopting the ASU’s guidance, entities will not separately present an embedded conversion feature in such debt within equity. ASU 2020-06 is effective for public business entities for fiscal years beginning after December 15, 2021, including interim periods therein. The Company is currently evaluating the impact ASU 2020-06 will have on its consolidated financial statements or disclosures; however, does not expect the adoption to have a material impact. |
Acquisitions
Acquisitions | 6 Months Ended |
Jun. 30, 2021 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions WellRyde On May 6, 2021, the Company entered into an asset purchase agreement (the “Purchase Agreement”) with nuVizz, Inc., a Georgia corporation, to purchase the software WellRyde. Pursuant to the Purchase Agreement, the Company purchased the WellRyde software developed by nuVizz for total consideration of $12.0 million in cash, subject to certain adjustments, as provided in the Purchase Agreement. The acquired assets are recorded in other assets on the balance sheet and the Company intends to finalize the purchase accounting for this transaction in the third quarter of 2021. Simplura Health Group On November 18, 2020, the Company completed its acquisition of Simplura. Simplura was a nonpublic entity that specializes in personal care services offering placements of personal care assistants, home health aides, and skilled nurses for senior citizens, disabled adults and other high-needs patients. Simplura operates from its headquarters in Valley Stream, New York, with approximately 57 branches across seven states, including in several of the nation’s largest personal care markets. The acquisition of Simplura adds a business segment in personal care—a large, rapidly growing sector of healthcare that complements the NEMT segment. The stock transaction was accounted for in accordance with ASC 805, Business Combinations in which a wholly-owned subsidiary of ModivCare Inc. acquired 100 percent of the voting stock of Simplura for $548.6 million (a preliminary purchase price of $569.8 million less $21.2 million of cash that was acquired). The following is a preliminary estimate, as a result of certain items noted in the table below, of the allocation of the consideration transferred to acquired identifiable assets and assumed liabilities, net of cash acquired, as of the acquisition date of November 17, 2020 (in thousands): Cash $ 21,182 Accounts receivable (1) 69,882 Prepaid expenses and other (2) 9,089 Property and equipment (3) 1,640 Intangible assets (4) 264,770 Operating right of use asset (5) 9,447 Goodwill (6) 313,254 Other assets (7) 4,505 Accounts payable and accrued liabilities (8) (46,043) Accrued expense (8) (2,564) Deferred revenue (8) (2,871) Deferred acquisition payments (9) (4,046) Deferred acquisition note payable (8) (1,050) Operating lease liabilities (5) (9,493) Deferred tax liabilities (10) (57,883) Total of assets acquired and liabilities assumed $ 569,819 The acquisition method of accounting incorporates fair value measurements that can be highly subjective, and it is possible the application of reasonable judgment could develop different assumptions resulting in a range of alternative estimates using the same facts and circumstances. Upon finalization of the preliminary items noted below there may be related adjustments to certain of such items and to goodwill and income taxes. All items are expected to be finalized by the third quarter of 2021. (1) Management has valued accounts receivable based on the estimated future collectability of the receivables portfolio. This estimate is preliminary as the Company's evaluation of the collectability of receivables is ongoing. (2) Given the short-term nature of the balance of prepaid expenses carrying value represents the fair value. (3) The acquired property and equipment consists primarily of leasehold improvements, furniture and fixtures, and vehicles. The fair value of the property and equipment was determined based upon the best and highest use of the property with final values determined using cost and comparable sales methods. (4) The allocation of consideration exchanged to intangible assets acquired is as follows (in thousands): Type Useful Life Value Payor network Amortizable 15 years $ 221,000 Trademarks and trade names Amortizable 10 years 43,000 Licenses Not Amortizable Indefinite 770 $ 264,770 The Company valued trademarks and trade names utilizing the relief of royalty method and payor network utilizing the multi-period excess earnings method, a form of the income approach. (5) The fair value of the operating lease liability and corresponding right-of-use asset (current and long-term) was recorded at $11.7 million based on market rates available to the Company during our preliminary purchase price allocation. This assessment has since been updated through the implementation of ASC 842 at the Personal Care segment as of June 30, 2021, and the related balances have been updated to $9.5 million and $9.4 million, respectively. This assessment remains preliminary as of the date of our filing and will be finalized with final purchase accounting in the third quarter of 2021. (6) The acquisition preliminarily resulted in $309.7 million of goodwill as a result of expected synergies due to value-based care and solutions being provided to similar patient populations that partner with many of the same payor groups. In the second quarter of 2021 a closing cash adjustment of $3.5 million was paid to OEP AM, which, along with other immaterial adjustments, increased the goodwill related to this transaction to $313.3 million. Purchase accounting will be finalized in the third quarter of 2021. None of the acquired goodwill is deductible for tax purposes. (7) Included in Other assets are indemnification guarantees with a value of $3.9 million, obtained in conjunction with the acquisition of Simplura to cover certain acquired liabilities totaling approximately $3.9 million. (8) Accounts payable as well as certain other current and non-current assets and liabilities are stated at fair value as of the acquisition date. (9) Deferred acquisition payments are associated with historical acquisitions by Simplura. Of this balance, $0.1 million has been released through the second quarter of 2021. (10) Net deferred tax liabilities represented the expected future tax consequences of temporary differences between the fair values of the assets acquired and liabilities assumed and their tax bases. See Note 13, Income Taxes , for additional discussion of the Company’s combined income tax position subsequent to the acquisition. Assuming Simplura had been acquired as of January 1, 2020, and the results of Simplura had been included in operations beginning on January 1, 2020, the following tables provide estimated unaudited pro forma results of operations for the three and six months ended June 30, 2021 and 2020 (in thousands, except earnings per share). The estimated pro forma net income adjusts for the effect of fair value adjustments related to the acquisition, transaction costs and other non-recurring costs directly attributable to the transaction and the impact of the additional debt to finance the acquisition. Three months ended June 30, Six months ended June 30, 2021 2020 2021 2020 Actual Proforma Actual Proforma Revenue $ 474,448 $ 395,245 $ 928,058 $ 881,946 Income (loss) from continuing operations, net 13,757 (10,659) 32,637 11,788 Diluted earnings (loss) per share $ 0.97 $ (0.82) $ 2.28 $ 0.90 Estimated unaudited pro forma information is not necessarily indicative of the results that actually would have occurred had the acquisition been completed on the date indicated or the future operating results. The supplemental proforma earnings were adjusted to exclude the impact of Simplura's historical interest expense of $6.9 million and $13.9 million for the three and six months ended June 30, 2020. NMT On May 6, 2020, ModivCare Solutions, LLC, entered into an equity purchase agreement with the Seller and NMT, acquiring all of the outstanding capital stock. NMT was acquired for total consideration of $80.0 million less certain adjustments, in an all cash transaction. The transaction was accounted for as an asset acquisition in accordance with ASC 805, Business Combinations . The Company incurred transaction costs for the acquisition of $0.8 million during the year ended December 31, 2020. These costs were capitalized as a component of the purchase price. The consideration paid for the acquisition is as follows (in thousands): Value Consideration paid $ 80,000 Transaction costs 774 Restricted cash received (3,109) Net consideration $ 77,665 Restricted cash acquired was related to a security reserve for a contract and is presented in other current assets in our condensed consolidated balance sheet as of June 30, 2021. No liabilities were assumed. The fair value allocation of the net consideration is as follows (in thousands, except useful lives): Type Useful Life Value Payor relationships Amortizable 6 years $ 75,514 Trade names and trademarks Amortizable 3 years 2,151 $ 77,665 |
Segments
Segments | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Segments | Segments On November 18, 2020, the Company acquired Simplura, which operates as a personal care service provider. As a result, at June 30, 2021, the Company’s chief operating decision maker reviews financial performance and allocates resources based on three segments as follows: • NEMT - which operates primarily under the brands ModivCare Solutions, LLC, and Circulation, is the largest manager of NEMT programs for state governments and managed care organizations ("MCOs") in the U.S and includes the Company’s activities for executive, accounting, finance, internal audit, tax, legal, certain strategic and development functions and the Company’s insurance captive. • Personal Care - which consists of Simplura, and provides personal care to Medicaid patient populations, including seniors and disabled adults, in need of care monitoring and assistance performing activities of daily living. • Matrix Investment - which consists of a minority investment in Matrix, provides a broad array of assessment and care management services that improve health outcomes for individuals and financial performance for health plans. Matrix’s national network of community-based clinicians delivers in-home services while its fleet of mobile health clinics provides community-based care with advance diagnostic capabilities. The following tables set forth certain financial information from continuing operations attributable to the Company’s business segments (in thousands): Three months ended June 30, 2021 NEMT Personal Care Matrix Investment Total Service revenue, net $ 364,760 $ 109,688 $ — $ 474,448 Grant income (1) — 852 — 852 Service expense 292,657 86,909 — 379,566 General and administrative expense (2) 41,621 14,726 — 56,347 Depreciation and amortization 6,935 4,884 — 11,819 Operating income $ 23,547 $ 4,021 $ — $ 27,568 Equity in net income (loss) of investee $ — $ — $ (267) $ (267) Equity investment $ — $ — $ 141,163 $ 141,163 Goodwill $ 135,216 $ 313,544 $ — $ 448,760 Total assets (continuing operations) $ 727,077 $ 707,958 $ 141,163 $ 1,576,198 Six months ended June 30, 2021 NEMT Personal Care Matrix Investment Total Service revenue, net $ 708,176 $ 219,882 $ — $ 928,058 Grant income (1) — 3,500 — 3,500 Service expense 565,072 174,826 — 739,898 General and administrative expense (2) 81,587 29,630 — 111,217 Depreciation and amortization 14,248 9,811 — 24,059 Operating income $ 47,269 $ 9,115 $ — $ 56,384 Equity in net income (loss) of investee $ — $ — $ (4,770) $ (4,770) Equity investment $ — $ — $ 141,163 $ 141,163 Goodwill $ 135,216 $ 313,544 $ — $ 448,760 Total assets (continuing operations) $ 727,077 $ 707,958 $ 141,163 $ 1,576,198 (1) Grant income for the Personal Care segment includes $3.5 million of provider relief funds received under the CARES Act. These funds are intended to support healthcare providers by reimbursing them for expenses incurred, or revenue lost, as a result of the COVID-19 pandemic. See Note 2, Significant Accounting Policies and Recent Accounting Pronouncements. (2) General and administrative expense for the NEMT segment includes $2.0 million of costs related to the development of the nutritional meal delivery business offering. As this line of business has not yet commenced, and there is no discrete financial information available related to it, it is not considered a separate reportable segment at this time. Three months ended June 30, 2020 NEMT Matrix Investment Total Service revenue, net $ 282,256 $ — $ 282,256 Service expense 196,106 — 196,106 General and administrative expense 31,199 — 31,199 Depreciation and amortization 6,108 — 6,108 Operating income $ 48,843 $ — $ 48,843 Equity in net income of investee $ — $ 4,425 $ 4,425 Equity investment $ — $ 131,974 $ 131,974 Goodwill $ 135,216 $ — $ 135,216 Total assets (continuing operations) $ 522,271 $ 131,974 $ 654,245 Six months ended June 30, 2020 NEMT Matrix Investment Total Service revenue, net $ 649,547 $ — $ 649,547 Service expense 528,767 — 528,767 General and administrative expense 51,994 — 51,994 Depreciation and amortization 9,898 — 9,898 Operating income $ 58,888 $ — $ 58,888 Equity in net income of investee $ — $ 1,875 $ 1,875 Equity investment $ — $ 131,974 $ 131,974 Goodwill $ 135,216 $ — $ 135,216 Total assets (continuing operations) $ 522,271 $ 131,974 $ 654,245 |
Revenue Recognition
Revenue Recognition | 6 Months Ended |
Jun. 30, 2021 | |
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 and recognizes revenue over time instead of at points in time. Capitation structure Under capitated contracts, payors pay a fixed amount per eligible member. 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 customer’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 periodically reconciled based on actual trip volume and may result in refunds to the customer, or additional payments due from the customer. Contracts with risk corridor or profit rebate provisions allow for profit within a certain corridor and once we reach profit level thresholds or maximums, we discontinue recognizing revenue and instead record a liability within the accrued contract payable account. This liability is reduced through future increases in trip volume and periodic settlements with the customer. 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. Capitation rates are generally based on expected costs and volume of services. Because Medicare pays capitation using a “risk adjustment model,” which compensates providers based on the health status (acuity) of each individual enrollee, providers with higher acuity enrollees receive more, and those with lower acuity enrollees receive less of the capitation that can be allocated to service providers. Under the risk adjustment model, capitation is paid on an interim basis based on enrollee data submitted for the preceding year and is adjusted in subsequent periods after the final data is compiled. Fee-for-service structure Fee-for-service ("FFS") revenue represents revenue earned under 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. Customer Information Of the NEMT segment’s revenue, 9.2% and 10.4% were derived from one U.S. state Medicaid program for the six months ended June 30, 2021, and 2020, respectively. Of the Personal Care segment's revenue, 28.2% was derived from one U.S. state Medicaid program for the six months ended June 30, 2021. In addition, substantially all of the Company’s revenues are generated from domestic governmental agencies or entities that contract with governmental agencies. Disaggregation of Revenue The following table summarizes disaggregated revenue from contracts with customers by contract type (in thousands): Three months ended June 30, 2021 Three months ended June 30, 2020 State Medicaid agency and Medicare contracts $ 207,432 $ 151,545 Managed care organization contracts 267,016 130,711 Total Service revenue, net $ 474,448 $ 282,256 Capitated contracts $ 312,078 $ 253,858 Non-capitated contracts 162,370 28,398 Total Service revenue, net $ 474,448 $ 282,256 Six months ended June 30, 2021 Six months ended June 30, 2020 State Medicaid agency and Medicare contracts $ 410,752 $ 332,276 Managed care organization contracts 517,306 317,271 Total Service revenue, net $ 928,058 $ 649,547 Capitated contracts $ 608,312 $ 554,582 Non-capitated contracts 319,746 94,965 Total Service revenue, net $ 928,058 $ 649,547 The table above includes $109.7 million and $219.9 million of non-capitated revenue for the three and six months ended June 30, 2021 related to the Personal Care Segment through the acquisition of Simplura. During the three months ended June 30, 2021 and 2020, the Company recognized a $0.4 million increase to and a $3.6 million reduction of service revenue respectively, from contractual adjustments relating to performance obligations satisfied in previous periods to which the customer agreed. During the six months ended June 30, 2021 and 2020, the Company recognized a $5.3 million increase to and a $3.5 million reduction of service revenue, respectively, from contractual adjustments relating to performance obligations satisfied in previous periods to which the customer agreed. Related Balance Sheet Accounts The following table provides information about accounts receivable, net (in thousands): June 30, 2021 December 31, 2020 Accounts receivable $ 206,494 $ 164,622 Reconciliation contracts receivable (1) 21,006 35,724 Allowance for doubtful accounts (527) (2,403) Accounts receivable, net $ 226,973 $ 197,943 (1) Reconciliation contracts receivable, primarily represent underpayments and receivables on certain contracts with reconciliation and risk corridor provisions. The following table provides information about other accounts included on the accompanying condensed consolidated balance sheets (in thousands): June 30, 2021 December 31, 2020 Accrued contract payables (1) $ 296,717 $ 101,705 Long-term contract payables (2) $ 2,292 $ 72,183 Deferred revenue, current $ 2,370 $ 2,923 Deferred revenue, long-term, included in “other long-term liabilities” $ 453 $ 566 (1) Accrued contract payables primarily represent overpayments and liability reserves on certain risk corridor, profit rebate and reconciliation contracts due to lower activity as a result of COVID-19. (2) Long-term contract payables primarily represent liability reserves on certain risk corridor, profit rebate and reconciliation contracts due to lower activity as a result of COVID-19 that may be repaid in greater than 12 months. |
Cash, Cash Equivalents and Rest
Cash, Cash Equivalents and Restricted Cash | 6 Months Ended |
Jun. 30, 2021 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows (in thousands): June 30, 2021 2020 Cash and cash equivalents $ 290,909 $ 41,786 Restricted cash, current 19 3,213 Current assets of discontinued operations — 89 Cash, cash equivalents and restricted cash $ 290,928 $ 45,088 |
Equity Investment
Equity Investment | 6 Months Ended |
Jun. 30, 2021 | |
Equity Method Investment, Summarized Financial Information [Abstract] | |
Equity Investment | Equity Investment As of June 30, 2021 and December 31, 2020, 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 this 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 loss (income) of investee” in the accompanying consolidated statements of operations. The carrying amount of the assets included in the Company’s condensed consolidated balance sheets and the maximum loss exposure related to the Company’s interest in Matrix as of June 30, 2021 and December 31, 2020 totaled $141.2 million and $137.5 million , respectively. Summary financial information for Matrix on a standalone basis is as follows (in thousands): June 30, 2021 December 31, 2020 Current assets $ 143,054 $ 143,110 Long-term assets $ 605,262 $ 619,642 Current liabilities $ 65,564 $ 81,920 Long-term liabilities $ 343,572 $ 351,036 Three months ended June 30, 2021 Three months ended June 30, 2020 Revenue $ 114,333 $ 90,667 Operating income $ 4,549 $ 15,258 Net income $ 319 $ 8,892 Six months ended June 30, 2021 Six months ended June 30, 2020 Revenue $ 238,372 $ 151,971 Operating income $ 20,157 $ 13,585 Net income $ 8,484 $ 2,535 |
Prepaid Expenses and Other Curr
Prepaid Expenses and Other Current Assets | 6 Months Ended |
Jun. 30, 2021 | |
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 consisted of the following (in thousands): June 30, 2021 December 31, 2020 Prepaid income taxes $ 2,995 $ 14,633 Prepaid insurance 11,821 7,577 Prepaid rent 1,019 1,196 Other prepaid expenses 10,439 8,479 Total prepaid expenses and other current assets $ 26,274 $ 31,885 |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 6 Months Ended |
Jun. 30, 2021 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Current Liabilities | Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following (in thousands): June 30, 2021 December 31, 2020 Accrued compensation and related liabilities (1) $ 43,611 $ 57,201 Accrued cash settled stock-based compensation 25,347 19,376 Deferred operating expenses 9,365 8,018 Union pension obligations 8,150 6,632 Accrued legal fees 5,337 3,228 Accrued interest 4,179 4,927 Deferred acquisition payments 3,978 3,978 Other 9,176 13,650 Total accrued expenses and other current liabilities $ 109,143 $ 117,010 |
Debt
Debt | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt | Debt Senior Unsecured Notes On November 4, 2020, the Company issued $500.0 million in aggregate principal amount of 5.875% senior unsecured notes due on November 15, 2025 (the “Notes”). The Notes were issued pursuant to an indenture, dated November 4, 2020 (the “Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (the “Trustee”). The Notes are senior unsecured obligations and rank senior in right of payment to all of the Company's future subordinated indebtedness, rank equally in right of payment with all of the Company's existing and future senior indebtedness, are effectively subordinated to any of the Company's existing and future secured indebtedness, including indebtedness under the Credit Facility, to the extent of the value of the assets securing such indebtedness, and are structurally subordinated to all of the existing and future liabilities (including trade payables) of each of the Company’s non-guarantor subsidiaries. The Indenture contains covenants that, among other things, restrict the Company’s ability and the ability of its restricted subsidiaries to, among other things: incur additional indebtedness or issue disqualified capital stock; make certain investments; create or incur certain liens; enter into certain transactions with affiliates; merge, consolidate, amalgamate or transfer substantially all of its assets; agree to dividend or other payment restrictions affecting its restricted subsidiaries; and transfer or sell assets, including capital stock of its restricted subsidiaries. These covenants, however, are subject to a number of important exceptions and qualifications, and certain covenants may be suspended in the event the Notes are assigned an investment grade rating from two of three ratings agencies. The Indenture provides that the Notes may become subject to redemption under certain circumstances, including if certain escrowed property has not been released from the escrow account in connection with the consummation of the acquisition of the Simplura Group. The Company may also redeem the Notes, in whole or in part, at any time prior to November 15, 2022, at a price equal to 100% of the principal amount of the Notes redeemed, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption plus a “make-whole” premium set forth in the Indenture. In addition, the Company may redeem up to 40% of the Notes prior to November 15, 2022, at a redemption price of 105.875% of the principal amount, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption, with the proceeds of certain equity offerings, subject to certain conditions as specified in the Indenture Agreement. At any time prior to November 15, 2022, during each calendar year, the Company may redeem up to 10% of the aggregate principal amount of the Notes at a purchase price equal to 103% of the aggregate principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the date of redemption. On or after November 15, 2022, the Company may redeem all or a part of the Notes upon not less than ten days’ nor more than 60 days’ notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest, if any, on the Notes redeemed, to, but excluding, the applicable redemption date, if redeemed during the 12-month period beginning on November 15 of the years indicated below: Year Percentage 2022 102.938% 2023 101.469% 2024 and thereafter 100.000% The Company will pay interest on the Notes at 5.875% per annum until maturity. Interest is payable semi-annually in arrears on May 15 and November 15 of each year, with the first interest payment date being May 15, 2021. Principal payments are not required until the maturity date on November 15, 2025 when 100% of the outstanding principal will be required to be repaid. As a part of the bond issuance process, we incurred a $9.0 million bridge commitment fee that provided a potential funding backstop in the event that the Notes did not meet the desired subscription level to be used to acquire Simplura. That commitment expired unused upon closing of the Notes and the fee was expensed in Q4 2020. Debt issuance costs of $14.5 million were incurred in relation to the Notes issuance and these costs were deferred and are amortized to interest cost over the term of the Notes. As of June 30, 2021, $12.6 million of unamortized deferred issuance costs was netted against the long-term debt balance on the condensed consolidated balance sheet. Credit Facility The Company is a party to the amended and restated credit and guaranty agreement, dated as of August 2, 2013 (as amended, the “Credit Agreement”), with Bank of America, N.A., as administrative agent, swing line lender and letter of credit issuer, and the other lenders party thereto. On May 6, 2020, the Company entered into the Seventh Amendment to the Amended and Restated Credit and Guaranty Agreement (the “Seventh Amendment”) which, among other things, extended the maturity date to August 1, 2021, expanded the amount available under the revolving credit facility (the “Credit Facility”) from $200.0 million to $225.0 million, and increased the sub-facility for letters of credits from $25.0 million to $40.0 million. Interest on the loans is payable quarterly in arrears. In addition, the Company is obligated to pay a quarterly commitment fee based on a percentage of the unused portion of each lender’s commitment under the 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. On October 16, 2020, the Company entered into the Eighth Amendment to the Amended and Restated Credit and Guaranty Agreement (the “Eighth Amendment”), which among other things, amended the Credit Facility to permit the incurrence of additional debt to finance the acquisition of Simplura (the "Simplura Acquisition"), permit borrowing under the Credit Facility to partially fund the Simplura Acquisition with limited conditions to such borrowing, increase the top interest rate margin that may apply to loans thereunder, and revise our permitted ratio of EBITDA to indebtedness. In addition, the Eighth Amendment extended the maturity date to August 2, 2023. See Note 3, Acquisitions , for further information on the acquisition. |
Stock-Based Compensation and Si
Stock-Based Compensation and Similar Arrangements | 6 Months Ended |
Jun. 30, 2021 | |
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 and non-employee directors under the Company's 2006 Long-Term Incentive Plan, as amended and restated effective July 27, 2016 (the “Equity Incentive Plan”). The Equity Incentive 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. The following table reflects the amount of stock-based compensation, for share settled awards, recorded in each financial statement line item for the three months ended June 30, 2021 and 2020 and six months ended June 30, 2021 and 2020 (in thousands): Three months ended June 30, Six months ended June 30, 2021 2020 2021 2020 Service expense $ — $ 54 $ — $ 119 General and administrative expense 1,472 675 2,659 1,653 Total stock-based compensation $ 1,472 $ 729 $ 2,659 $ 1,772 At June 30, 2021 , the Company had 279,707 stock options outstanding with a weighted-average exercise price of $85.56. The Company also had 20,996 unvested restricted stock awards ("RSAs") and 57,380 unvested restricted stock units ("RSUs") outstanding at June 30, 2021 with a weighted-average grant date fair value of $89.52 and $110.94, respectively. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share The following table details the computation of basic and diluted earnings per share (in thousands, except share and per share data): Three months ended June 30, Six months ended June 30, 2021 2020 2021 2020 Numerator: Net income $ 13,672 $ 36,998 $ 32,513 $ 53,096 Dividends on convertible preferred stock outstanding — (76) — (1,171) Dividends paid pursuant to the Conversion Agreement — (790) — (790) Consideration paid in excess of preferred cost basis pursuant to the Conversion Agreement — (48,951) — (48,951) Income allocated to participating securities — — — (264) Net income (loss) available to common stockholders $ 13,672 $ (12,819) $ 32,513 $ 1,920 Continuing operations $ 13,757 $ (12,518) $ 32,637 $ 2,423 Discontinued operations (85) (301) (124) (503) Net income (loss) available to common stockholders $ 13,672 $ (12,819) $ 32,513 $ 1,920 Denominator: Denominator for basic earnings per share -- weighted-average shares 14,025,325 13,077,596 14,151,946 13,032,931 Effect of dilutive securities: Common stock options 115,335 — 130,819 10,347 Restricted stock 34,934 — 47,029 16,421 Denominator for diluted earnings per share -- adjusted weighted-average shares assumed conversion 14,175,594 13,077,596 14,329,794 13,059,699 Basic earnings (loss) per share: Continuing operations $ 0.98 $ (0.96) $ 2.31 $ 0.19 Discontinued operations (0.01) (0.02) (0.01) (0.04) Basic earnings (loss) per share $ 0.97 $ (0.98) $ 2.30 $ 0.15 Diluted earnings (loss) per share: Continuing operations $ 0.97 $ (0.96) $ 2.28 $ 0.19 Discontinued operations (0.01) (0.02) (0.01) (0.04) Diluted earnings (loss) per share $ 0.96 $ (0.98) $ 2.27 $ 0.15 Income allocated to participating securities is calculated by allocating a portion of net income attributable to ModivCare, less dividends on convertible stock, to the convertible preferred stockholders on a pro-rata, as converted basis; however, the convertible preferred stockholders are not allocated losses. 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 June 30, Six months ended June 30, 2021 2020 2021 2020 Stock options to purchase common stock 62,820 597,842 49,406 604,394 Convertible preferred stock — 633,454 — 715,657 Issuer Purchases of Equity Securities On March 8, 2021, the Board of Directors authorized a new stock repurchase program under which the Company may repurchase up to $75.0 million in aggregate value of the Company’s Common Stock through December 31, 2021, unless terminated earlier. Through June 30, 2021, 269,407 shares were repurchased under the program for $39.0 million. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s effective tax rate for continuing operations for the three and six months ended June 30, 2021 was 29.6% and 26.6% respectively. The effective tax rate for continuing operations for the three and six months ended June 30, 2020 was 28.0% and 9.2%, respectively. For the six months ended June 30, 2021, t he effective tax rate was higher th an the U.S. federal statutory rate of 21.0% primarily due to state income taxes and certain non-deductible expenses. For the six months ended June 30, 2020, the effective tax rate was lower than the U.S. federal statutory rate of 21.0% primarily due to the favorable impact of the CARES Act on the Company’s 2018 U.S. net operating losses ("NOLs"). During 2019, the Company received refunds from the Internal Revenue Service (“IRS”) totaling $30.8 million resulting from the loss on the sale of our workforce development segment ("WD Services segment") in 2018. As a result of the size of the refunds received, in October 2019, the IRS commenced a Joint Committee Review of the refunds. The review is still ongoing. The 2017 Tax Reform Act reduced the U.S. corporate income tax rate from 35% to 21% and provided that U.S. NOLs incurred after 2017 could only be carried forward to offset future taxable income. Pursuant to the CARES Act, which was enacted on March 27, 2020, the Company carried its 2018 NOL back five years. As a result, during the six months ended June 30, 2020, the Company recorded a $27.3 million receivable for the 2018 U.S. NOL carryback, and a $11.0 million tax benefit from the favorable carryback tax rate of 35% compared to a carryforward tax rate of 21%. The Company also recorded an additional income tax payable of $3.5 million for 2019 as a result of the 2018 NOL being carried back instead of carried forward. As of June 30, 2021, the Company has received all of the $27.3 million receivable for the 2018 U.S. NOL carryback. This $27.3 million is also subject to the ongoing IRS Joint Committee Review. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal proceedings In the ordinary course of business, the Company may from time to time be or become involved in various lawsuits. Unless otherwise expressly stated, our 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. On August 6, 2020, LogistiCare Solutions, LLC, the Company’s subsidiary now known as ModivCare Solutions, LLC (“ModivCare Solutions”), was served with a putative class action law suit 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. ModivCare Solutions has provided Mr. Farah’s counsel with a list of transportation providers meeting the definition for the putative class and anticipates notices about the putative class action being sent out to the potential class members in the coming weeks. ModivCare Solutions believes it will be able to decertify this class action after discovery and in any event intends to defend itself vigorously with respect to this matter, 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 ultimate outcome of this matter 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 violations of the federal False Claims Act by presenting claims for payment to government healthcare programs knowing that the prerequisites for such claims to be paid had not been met. The Relators seek to recover damages, fees and costs under the federal False Claims Act, including treble damages, civil penalties and attorneys’ fees. In addition, the Relators seek reinstatement to their jobs with the Mobile Care Entities. None of the Relators were employed by ModivCare Solutions. The federal government has declined to intervene against ModivCare Solutions. ModivCare Solutions filed a motion to dismiss the Complaint on April 22, 2019, and believes that the case will not have a material adverse effect on the Company’s business, liquidity, financial condition or results of operations. This case remains dormant as it relates to ModivCare Solutions. In 2017, one of our Personal Care segment subsidiaries, All Metro Home Care Services of New York, Inc. d/b/a All Metro Health Care (“All Metro”), received a class action lawsuit in state court claiming that, among other things, it failed to properly pay live-in caregivers who stay in patients’ homes for 24 hours per day (“live-ins”). The Company currently pays live-ins for 13 hours per day as supported through a written opinion letter from the New York State Department of Labor (“NYSDOL”). A similar case involving this issue has been heard by the New York Court of Appeals (New York’s highest court), which on March 26, 2019, issued a ruling reversing earlier lower courts’ decisions that an employer must pay live-ins for 24 hours. The Court of Appeals agreed with the NYSDOL’s interpretation to pay live-ins 13 hours instead of 24 hours if certain conditions were being met. If the class action lawsuit on this matter is allowed to proceed, and is successful, All Metro may be liable for back wages and litigated damages going back to November 2011. All Metro intends to defend itself vigorously with respect to this matter, believes that it is and has been in compliance in all material respects with the laws and regulations covering pay for live-in caregivers, and does not believe in any event that the ultimate outcome of this matter will have a material adverse effect on the Company’s business, liquidity, financial condition or results of operations. |
Transactions with Related Parti
Transactions with Related Parties | 6 Months Ended |
Jun. 30, 2021 | |
Related Party Transactions [Abstract] | |
Transactions with Related Parties | Transactions with Related Parties Cash-Settled Awards On an annual basis, the Company grants stock equivalent unit awards (“SEUs”) to Coliseum Capital Management, LLC (“Coliseum”) as compensation for the board of directors’ service of Christopher Shackelton in lieu of the restricted share awards that are given to our other non-employee directors. These SEUs typically have a one-year vesting schedule and are paid out in cash upon vesting based upon the closing price of the Company’s common stock on the date of vesting. On February 10, 2021, the Company granted Coliseum 725 SEUs under this program. In addition, the Company granted stock option equivalent units (“SOEUs”) to Coliseum in September 2014 that are fully vested. The SOEUs are accounted for as liability awards, with the recorded expense adjustment attributable to the Company’s change in stock price from the previous reporting period. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2021 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On July 26, 2021, ModivCare announced that it signed a merger agreement to acquire CareFinders Total Care LLC (“CareFinders”), a personal care provider in the Northeast, with a presence in New Jersey, Pennsylvania, and Connecticut. Under the terms of the agreement, ModivCare has agreed to acquire 100% of the equity interests in CareFinders for a cash purchase price of $340 million, subject to customary purchase price adjustments. The purchase price is inclusive of an estimated $34 million of net present value tax attributes generated by the transaction, implying a net purchase price of approximately $306 million. The transaction is expected to close in the third quarter of 2021, subject to regulatory approvals and other customary closing conditions. On August 3, 2021, ModivCare announced that it signed a purchase agreement to acquire VRI Intermediate Holdings, LLC (“VRI”), a provider of remote patient monitoring solutions. VRI manages a comprehensive suite of services, including personal emergency response systems, vitals monitoring, medication management, and data-driven patient engagement solutions. Under the terms of the agreement, ModivCare has agreed to acquire 100% of the equity interests in VRI for a cash purchase price of $315 million, subject to customary purchase price adjustments. The transaction is expected to close in the third quarter of 2021, subject to regulatory approvals and other customary closing conditions. The Company intends to fund the payment of the purchase price for these transactions with a combination of cash on hand, funds to be drawn under the Company’s undrawn $225 million revolving Credit Facility, as amended, and net proceeds from a $400 million committed debt financing from Deutsche Bank Securities Inc. and Jefferies LLC. |
Significant Accounting Polici_2
Significant Accounting Policies and Recent Accounting Pronouncements (Policies) | 6 Months Ended |
Jun. 30, 2021 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The Company follows accounting standards set 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 and six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2021. 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 condensed consolidated financial statements. The condensed consolidated balance sheet at December 31, 2020 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, 2020. The Company accounts for its investment in Matrix using the equity method, as the Company does not control the decision-making process or business management practices of Matrix. While the Company has access to certain information and performs certain procedures to review the reasonableness of information, the Company relies on the management of Matrix to provide accurate financial information prepared in accordance with GAAP. The Company receives audit reports relating to such financial information from Matrix’s independent auditors on an annual basis. The Company is not aware of any errors in or possible misstatements of the financial information provided by Matrix that would have a material effect on the Company’s consolidated financial statements. See Note 7, Equity Investment , for further information. |
Use of Estimates | 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. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements The Company adopted the following accounting pronouncements during the six months ended June 30, 2021: In January 2020, the FASB issued ASU 2020-01, Clarifying the Interactions Between Topic 321, Topic 323, and Topic 815 ("ASU 2020-01"), to clarify the interaction among the accounting standards for equity securities, equity method investments and certain derivatives. ASU 2020-01 is effective for public business entities for fiscal years beginning after December 15, 2020, including interim periods therein. There was no material impact to the financial statements from the adoption of this ASU. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes ("ASU 2019-12"). The ASU removes certain exceptions to the general principles in ASC 740, Income Taxes , and also clarifies and amends existing guidance to reduce complexity in accounting for income taxes. The ASU is effective for fiscal years beginning after December 15, 2020, including interim periods within that fiscal year, with early adoption permitted. There was no material impact to the financial statements from the adoption of this ASU. Recent accounting pronouncements that the Company has yet to adopt are as follows: In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting ("ASU 2020-04") which provides optional expedients and exceptions for applying GAAP to contract modifications, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued due to reference rate reform. The relief granted in ASC 848, Reference Rate Reform ("ASC 848"), is applicable only to legacy contracts if the amendments made to the agreements are solely for reference rate reform activities. The provisions of ASC 848 must be applied for all transactions other than derivatives, which may be applied at a hedging relationship level. Entities may apply the provisions as of the beginning of the reporting period when the election is made (i.e. as early as the first quarter 2020). Unlike other topics, the provisions of this update are only available until December 31, 2022, when the reference rate replacement activity is expected to be completed. The Company is currently evaluating the impact ASU 2020-04 will have on its consolidated financial statements or disclosures; however, does not expect the adoption to have a material impact. In August 2020, the FASB issued ASU 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging— Contracts in Entity’s Own Equity (Subtopic 815-40) ("ASU 2020-06") which addresses the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity. The update limits the accounting models for convertible instruments resulting in fewer embedded conversion features being separately recognized from the host contract. Specifically, ASU 2020-06 removes from GAAP the separation models for convertible debt with a cash conversion feature and convertible instruments with a beneficial conversion feature. As a result, after adopting the ASU’s guidance, entities will not separately present an embedded conversion feature in such debt within equity. ASU 2020-06 is effective for public business entities for fiscal years beginning after December 15, 2021, including interim periods therein. The Company is currently evaluating the impact ASU 2020-06 will have on its consolidated financial statements or disclosures; however, does not expect the adoption to have a material impact. |
Acquisitions (Tables)
Acquisitions (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following is a preliminary estimate, as a result of certain items noted in the table below, of the allocation of the consideration transferred to acquired identifiable assets and assumed liabilities, net of cash acquired, as of the acquisition date of November 17, 2020 (in thousands): Cash $ 21,182 Accounts receivable (1) 69,882 Prepaid expenses and other (2) 9,089 Property and equipment (3) 1,640 Intangible assets (4) 264,770 Operating right of use asset (5) 9,447 Goodwill (6) 313,254 Other assets (7) 4,505 Accounts payable and accrued liabilities (8) (46,043) Accrued expense (8) (2,564) Deferred revenue (8) (2,871) Deferred acquisition payments (9) (4,046) Deferred acquisition note payable (8) (1,050) Operating lease liabilities (5) (9,493) Deferred tax liabilities (10) (57,883) Total of assets acquired and liabilities assumed $ 569,819 The acquisition method of accounting incorporates fair value measurements that can be highly subjective, and it is possible the application of reasonable judgment could develop different assumptions resulting in a range of alternative estimates using the same facts and circumstances. Upon finalization of the preliminary items noted below there may be related adjustments to certain of such items and to goodwill and income taxes. All items are expected to be finalized by the third quarter of 2021. (1) Management has valued accounts receivable based on the estimated future collectability of the receivables portfolio. This estimate is preliminary as the Company's evaluation of the collectability of receivables is ongoing. (2) Given the short-term nature of the balance of prepaid expenses carrying value represents the fair value. (3) The acquired property and equipment consists primarily of leasehold improvements, furniture and fixtures, and vehicles. The fair value of the property and equipment was determined based upon the best and highest use of the property with final values determined using cost and comparable sales methods. (4) The allocation of consideration exchanged to intangible assets acquired is as follows (in thousands): Type Useful Life Value Payor network Amortizable 15 years $ 221,000 Trademarks and trade names Amortizable 10 years 43,000 Licenses Not Amortizable Indefinite 770 $ 264,770 The Company valued trademarks and trade names utilizing the relief of royalty method and payor network utilizing the multi-period excess earnings method, a form of the income approach. (5) The fair value of the operating lease liability and corresponding right-of-use asset (current and long-term) was recorded at $11.7 million based on market rates available to the Company during our preliminary purchase price allocation. This assessment has since been updated through the implementation of ASC 842 at the Personal Care segment as of June 30, 2021, and the related balances have been updated to $9.5 million and $9.4 million, respectively. This assessment remains preliminary as of the date of our filing and will be finalized with final purchase accounting in the third quarter of 2021. (6) The acquisition preliminarily resulted in $309.7 million of goodwill as a result of expected synergies due to value-based care and solutions being provided to similar patient populations that partner with many of the same payor groups. In the second quarter of 2021 a closing cash adjustment of $3.5 million was paid to OEP AM, which, along with other immaterial adjustments, increased the goodwill related to this transaction to $313.3 million. Purchase accounting will be finalized in the third quarter of 2021. None of the acquired goodwill is deductible for tax purposes. (7) Included in Other assets are indemnification guarantees with a value of $3.9 million, obtained in conjunction with the acquisition of Simplura to cover certain acquired liabilities totaling approximately $3.9 million. (8) Accounts payable as well as certain other current and non-current assets and liabilities are stated at fair value as of the acquisition date. (9) Deferred acquisition payments are associated with historical acquisitions by Simplura. Of this balance, $0.1 million has been released through the second quarter of 2021. (10) Net deferred tax liabilities represented the expected future tax consequences of temporary differences between the fair values of the assets acquired and liabilities assumed and their tax bases. See Note 13, Income Taxes , for additional discussion of the Company’s combined income tax position subsequent to the acquisition. |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | The allocation of consideration exchanged to intangible assets acquired is as follows (in thousands): Type Useful Life Value Payor network Amortizable 15 years $ 221,000 Trademarks and trade names Amortizable 10 years 43,000 Licenses Not Amortizable Indefinite 770 $ 264,770 The fair value allocation of the net consideration is as follows (in thousands, except useful lives): Type Useful Life Value Payor relationships Amortizable 6 years $ 75,514 Trade names and trademarks Amortizable 3 years 2,151 $ 77,665 |
Business Acquisition, Pro Forma Information | Three months ended June 30, Six months ended June 30, 2021 2020 2021 2020 Actual Proforma Actual Proforma Revenue $ 474,448 $ 395,245 $ 928,058 $ 881,946 Income (loss) from continuing operations, net 13,757 (10,659) 32,637 11,788 Diluted earnings (loss) per share $ 0.97 $ (0.82) $ 2.28 $ 0.90 |
Schedule of Business Acquisitions, by Acquisition | The consideration paid for the acquisition is as follows (in thousands): Value Consideration paid $ 80,000 Transaction costs 774 Restricted cash received (3,109) Net consideration $ 77,665 |
Segments (Tables)
Segments (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Segment Reporting [Abstract] | |
Financial Information Attributable to the Company's Business Segments | The following tables set forth certain financial information from continuing operations attributable to the Company’s business segments (in thousands): Three months ended June 30, 2021 NEMT Personal Care Matrix Investment Total Service revenue, net $ 364,760 $ 109,688 $ — $ 474,448 Grant income (1) — 852 — 852 Service expense 292,657 86,909 — 379,566 General and administrative expense (2) 41,621 14,726 — 56,347 Depreciation and amortization 6,935 4,884 — 11,819 Operating income $ 23,547 $ 4,021 $ — $ 27,568 Equity in net income (loss) of investee $ — $ — $ (267) $ (267) Equity investment $ — $ — $ 141,163 $ 141,163 Goodwill $ 135,216 $ 313,544 $ — $ 448,760 Total assets (continuing operations) $ 727,077 $ 707,958 $ 141,163 $ 1,576,198 Six months ended June 30, 2021 NEMT Personal Care Matrix Investment Total Service revenue, net $ 708,176 $ 219,882 $ — $ 928,058 Grant income (1) — 3,500 — 3,500 Service expense 565,072 174,826 — 739,898 General and administrative expense (2) 81,587 29,630 — 111,217 Depreciation and amortization 14,248 9,811 — 24,059 Operating income $ 47,269 $ 9,115 $ — $ 56,384 Equity in net income (loss) of investee $ — $ — $ (4,770) $ (4,770) Equity investment $ — $ — $ 141,163 $ 141,163 Goodwill $ 135,216 $ 313,544 $ — $ 448,760 Total assets (continuing operations) $ 727,077 $ 707,958 $ 141,163 $ 1,576,198 (1) Grant income for the Personal Care segment includes $3.5 million of provider relief funds received under the CARES Act. These funds are intended to support healthcare providers by reimbursing them for expenses incurred, or revenue lost, as a result of the COVID-19 pandemic. See Note 2, Significant Accounting Policies and Recent Accounting Pronouncements. (2) General and administrative expense for the NEMT segment includes $2.0 million of costs related to the development of the nutritional meal delivery business offering. As this line of business has not yet commenced, and there is no discrete financial information available related to it, it is not considered a separate reportable segment at this time. Three months ended June 30, 2020 NEMT Matrix Investment Total Service revenue, net $ 282,256 $ — $ 282,256 Service expense 196,106 — 196,106 General and administrative expense 31,199 — 31,199 Depreciation and amortization 6,108 — 6,108 Operating income $ 48,843 $ — $ 48,843 Equity in net income of investee $ — $ 4,425 $ 4,425 Equity investment $ — $ 131,974 $ 131,974 Goodwill $ 135,216 $ — $ 135,216 Total assets (continuing operations) $ 522,271 $ 131,974 $ 654,245 Six months ended June 30, 2020 NEMT Matrix Investment Total Service revenue, net $ 649,547 $ — $ 649,547 Service expense 528,767 — 528,767 General and administrative expense 51,994 — 51,994 Depreciation and amortization 9,898 — 9,898 Operating income $ 58,888 $ — $ 58,888 Equity in net income of investee $ — $ 1,875 $ 1,875 Equity investment $ — $ 131,974 $ 131,974 Goodwill $ 135,216 $ — $ 135,216 Total assets (continuing operations) $ 522,271 $ 131,974 $ 654,245 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table summarizes disaggregated revenue from contracts with customers by contract type (in thousands): Three months ended June 30, 2021 Three months ended June 30, 2020 State Medicaid agency and Medicare contracts $ 207,432 $ 151,545 Managed care organization contracts 267,016 130,711 Total Service revenue, net $ 474,448 $ 282,256 Capitated contracts $ 312,078 $ 253,858 Non-capitated contracts 162,370 28,398 Total Service revenue, net $ 474,448 $ 282,256 Six months ended June 30, 2021 Six months ended June 30, 2020 State Medicaid agency and Medicare contracts $ 410,752 $ 332,276 Managed care organization contracts 517,306 317,271 Total Service revenue, net $ 928,058 $ 649,547 Capitated contracts $ 608,312 $ 554,582 Non-capitated contracts 319,746 94,965 Total Service revenue, net $ 928,058 $ 649,547 |
Schedule of Accounts Receivable | The following table provides information about accounts receivable, net (in thousands): June 30, 2021 December 31, 2020 Accounts receivable $ 206,494 $ 164,622 Reconciliation contracts receivable (1) 21,006 35,724 Allowance for doubtful accounts (527) (2,403) Accounts receivable, net $ 226,973 $ 197,943 (1) Reconciliation contracts receivable, primarily represent underpayments and receivables on certain contracts with reconciliation and risk corridor provisions. |
Other Account Liabilities | The following table provides information about other accounts included on the accompanying condensed consolidated balance sheets (in thousands): June 30, 2021 December 31, 2020 Accrued contract payables (1) $ 296,717 $ 101,705 Long-term contract payables (2) $ 2,292 $ 72,183 Deferred revenue, current $ 2,370 $ 2,923 Deferred revenue, long-term, included in “other long-term liabilities” $ 453 $ 566 (1) Accrued contract payables primarily represent overpayments and liability reserves on certain risk corridor, profit rebate and reconciliation contracts due to lower activity as a result of COVID-19. (2) Long-term contract payables primarily represent liability reserves on certain risk corridor, profit rebate and reconciliation contracts due to lower activity as a result of COVID-19 that may be repaid in greater than 12 months. |
Cash, Cash Equivalents and Re_2
Cash, Cash Equivalents and Restricted Cash (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | |
Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows (in thousands): June 30, 2021 2020 Cash and cash equivalents $ 290,909 $ 41,786 Restricted cash, current 19 3,213 Current assets of discontinued operations — 89 Cash, cash equivalents and restricted cash $ 290,928 $ 45,088 |
Equity Investment (Tables)
Equity Investment (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Equity Method Investment, Summarized Financial Information [Abstract] | |
Income Statement and Balance Sheet Disclosure | Summary financial information for Matrix on a standalone basis is as follows (in thousands): June 30, 2021 December 31, 2020 Current assets $ 143,054 $ 143,110 Long-term assets $ 605,262 $ 619,642 Current liabilities $ 65,564 $ 81,920 Long-term liabilities $ 343,572 $ 351,036 Three months ended June 30, 2021 Three months ended June 30, 2020 Revenue $ 114,333 $ 90,667 Operating income $ 4,549 $ 15,258 Net income $ 319 $ 8,892 Six months ended June 30, 2021 Six months ended June 30, 2020 Revenue $ 238,372 $ 151,971 Operating income $ 20,157 $ 13,585 Net income $ 8,484 $ 2,535 |
Prepaid Expenses and Other Cu_2
Prepaid Expenses and Other Current Assets (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Prepaid Expense and Other Assets, Current [Abstract] | |
Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets consisted of the following (in thousands): June 30, 2021 December 31, 2020 Prepaid income taxes $ 2,995 $ 14,633 Prepaid insurance 11,821 7,577 Prepaid rent 1,019 1,196 Other prepaid expenses 10,439 8,479 Total prepaid expenses and other current assets $ 26,274 $ 31,885 |
Accrued Expenses and Other Cu_2
Accrued Expenses and Other Current Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses and other current liabilities consisted of the following (in thousands): June 30, 2021 December 31, 2020 Accrued compensation and related liabilities (1) $ 43,611 $ 57,201 Accrued cash settled stock-based compensation 25,347 19,376 Deferred operating expenses 9,365 8,018 Union pension obligations 8,150 6,632 Accrued legal fees 5,337 3,228 Accrued interest 4,179 4,927 Deferred acquisition payments 3,978 3,978 Other 9,176 13,650 Total accrued expenses and other current liabilities $ 109,143 $ 117,010 |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Debt Disclosure [Abstract] | |
Debt Instrument Redemption | On or after November 15, 2022, the Company may redeem all or a part of the Notes upon not less than ten days’ nor more than 60 days’ notice, at the redemption prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest, if any, on the Notes redeemed, to, but excluding, the applicable redemption date, if redeemed during the 12-month period beginning on November 15 of the years indicated below: Year Percentage 2022 102.938% 2023 101.469% 2024 and thereafter 100.000% |
Stock-Based Compensation and _2
Stock-Based Compensation and Similar Arrangements (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Share-based Payment Arrangement, Noncash Expense [Abstract] | |
Disclosure of Stock-based Compensation by Line Item | The following table reflects the amount of stock-based compensation, for share settled awards, recorded in each financial statement line item for the three months ended June 30, 2021 and 2020 and six months ended June 30, 2021 and 2020 (in thousands): Three months ended June 30, Six months ended June 30, 2021 2020 2021 2020 Service expense $ — $ 54 $ — $ 119 General and administrative expense 1,472 675 2,659 1,653 Total stock-based compensation $ 1,472 $ 729 $ 2,659 $ 1,772 |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 6 Months Ended |
Jun. 30, 2021 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings (Loss) Per Share | The following table details the computation of basic and diluted earnings per share (in thousands, except share and per share data): Three months ended June 30, Six months ended June 30, 2021 2020 2021 2020 Numerator: Net income $ 13,672 $ 36,998 $ 32,513 $ 53,096 Dividends on convertible preferred stock outstanding — (76) — (1,171) Dividends paid pursuant to the Conversion Agreement — (790) — (790) Consideration paid in excess of preferred cost basis pursuant to the Conversion Agreement — (48,951) — (48,951) Income allocated to participating securities — — — (264) Net income (loss) available to common stockholders $ 13,672 $ (12,819) $ 32,513 $ 1,920 Continuing operations $ 13,757 $ (12,518) $ 32,637 $ 2,423 Discontinued operations (85) (301) (124) (503) Net income (loss) available to common stockholders $ 13,672 $ (12,819) $ 32,513 $ 1,920 Denominator: Denominator for basic earnings per share -- weighted-average shares 14,025,325 13,077,596 14,151,946 13,032,931 Effect of dilutive securities: Common stock options 115,335 — 130,819 10,347 Restricted stock 34,934 — 47,029 16,421 Denominator for diluted earnings per share -- adjusted weighted-average shares assumed conversion 14,175,594 13,077,596 14,329,794 13,059,699 Basic earnings (loss) per share: Continuing operations $ 0.98 $ (0.96) $ 2.31 $ 0.19 Discontinued operations (0.01) (0.02) (0.01) (0.04) Basic earnings (loss) per share $ 0.97 $ (0.98) $ 2.30 $ 0.15 Diluted earnings (loss) per share: Continuing operations $ 0.97 $ (0.96) $ 2.28 $ 0.19 Discontinued operations (0.01) (0.02) (0.01) (0.04) Diluted earnings (loss) per share $ 0.96 $ (0.98) $ 2.27 $ 0.15 |
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 June 30, Six months ended June 30, 2021 2020 2021 2020 Stock options to purchase common stock 62,820 597,842 49,406 604,394 Convertible preferred stock — 633,454 — 715,657 |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Details) | Jun. 30, 2021 |
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 | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Grant income | $ 852 | $ 0 | $ 3,500 | $ 0 |
Accrued cash benefit, due from deferral of payroll taxes | $ 20,800 | $ 20,800 | ||
Accrued cash benefit, percent due In year one | 50.00% | 50.00% | ||
Accrued cash benefit, percent due in year two | 50.00% | 50.00% | ||
Accrued Liabilities | ||||
Disaggregation of Revenue [Line Items] | ||||
Accrued cash benefit, due from deferral of payroll taxes | $ 10,400 | $ 10,400 | ||
Other Noncurrent Liabilities | ||||
Disaggregation of Revenue [Line Items] | ||||
Accrued cash benefit, due from deferral of payroll taxes | $ 10,400 | 10,400 | ||
Grant income | ||||
Disaggregation of Revenue [Line Items] | ||||
Grant income | $ 3,500 |
Acquisitions (Details)
Acquisitions (Details) $ in Thousands | May 06, 2021USD ($) | Nov. 17, 2020USD ($) | May 06, 2020USD ($) | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2020USD ($) | Nov. 18, 2020branchstate |
Business Acquisition, Contingent Consideration [Line Items] | ||||||||
Operating lease right-of-use assets | $ 45,791 | $ 30,928 | ||||||
Goodwill | $ 313,300 | 448,760 | $ 135,216 | $ 135,216 | 444,927 | |||
Acquisition costs | $ 800 | |||||||
Personal Care | ||||||||
Business Acquisition, Contingent Consideration [Line Items] | ||||||||
Goodwill | 313,544 | |||||||
WellRyde | ||||||||
Business Acquisition, Contingent Consideration [Line Items] | ||||||||
Payments to acquire productive assets | $ 12,000 | |||||||
Simplura Health Group | ||||||||
Business Acquisition, Contingent Consideration [Line Items] | ||||||||
Number of branches | branch | 57 | |||||||
Number of states in which entity operates | state | 7 | |||||||
Business acquisition, percentage of voting interests acquired | 100.00% | |||||||
Net consideration | $ 548,600 | |||||||
Business combination, consideration transferred, cash from acquisition excluded | 569,800 | |||||||
Cash acquired from acquisition | 21,200 | |||||||
Operating lease, liability | 11,700 | |||||||
Operating lease right-of-use assets | 11,700 | |||||||
Goodwill | 313,254 | |||||||
Closing cash adjustment | 3,500 | |||||||
Business combination, indemnification assets, amount as of acquisition date | 3,900 | |||||||
Deferred acquisition payments | 4,046 | 100 | ||||||
Historical interest expense | $ 6,900 | $ 13,900 | ||||||
Simplura Health Group | Personal Care | ||||||||
Business Acquisition, Contingent Consideration [Line Items] | ||||||||
Operating lease, liability | 9,500 | |||||||
Operating lease right-of-use assets | $ 9,400 | |||||||
Simplura Health Group | Pro Forma | ||||||||
Business Acquisition, Contingent Consideration [Line Items] | ||||||||
Goodwill | $ 309,700 | |||||||
National MedTrans | ||||||||
Business Acquisition, Contingent Consideration [Line Items] | ||||||||
Net consideration | $ 77,665 | |||||||
Cash acquired from acquisition | 3,109 | |||||||
Consideration paid | $ 80,000 |
Acquisitions - Purchase Price A
Acquisitions - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Nov. 17, 2020 | Jun. 30, 2020 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 448,760 | $ 444,927 | $ 313,300 | $ 135,216 |
Simplura Health Group | ||||
Business Acquisition [Line Items] | ||||
Cash | 21,182 | |||
Accounts receivable | 69,882 | |||
Prepaid expenses and other | 9,089 | |||
Property and equipment | 1,640 | |||
Intangible assets | 264,770 | |||
Operating right of use asset | 9,447 | |||
Goodwill | 313,254 | |||
Other assets | 4,505 | |||
Accounts payable and accrued liabilities | (46,043) | |||
Accrued expense | (2,564) | |||
Deferred revenue | (2,871) | |||
Deferred acquisition payments | $ (100) | (4,046) | ||
Deferred acquisition note payable | (1,050) | |||
Operating lease liabilities | (9,493) | |||
Deferred tax liabilities | (57,883) | |||
Total of assets acquired and liabilities assumed | $ 569,819 |
Acquisitions - Intangible Asset
Acquisitions - Intangible Assets Acquired (Details) - USD ($) $ in Thousands | Nov. 17, 2020 | May 06, 2020 |
Simplura Health Group | ||
Business Acquisition [Line Items] | ||
Intangible assets | $ 264,770 | |
Simplura Health Group | Payor network | ||
Business Acquisition [Line Items] | ||
Useful Life | 15 years | |
Finite-lived intangibles | $ 221,000 | |
Simplura Health Group | Trademarks and trade names | ||
Business Acquisition [Line Items] | ||
Useful Life | 10 years | |
Finite-lived intangibles | $ 43,000 | |
Simplura Health Group | Licenses | ||
Business Acquisition [Line Items] | ||
Indefinite-lived intangibles | $ 770 | |
National MedTrans | ||
Business Acquisition [Line Items] | ||
Finite-lived intangibles | $ 77,665 | |
National MedTrans | Payor network | ||
Business Acquisition [Line Items] | ||
Useful Life | 6 years | |
Finite-lived intangibles | $ 75,514 | |
National MedTrans | Trademarks and trade names | ||
Business Acquisition [Line Items] | ||
Useful Life | 3 years | |
Finite-lived intangibles | $ 2,151 |
Acquisitions - Pro Forma Inform
Acquisitions - Pro Forma Information (Details) - Simplura Health Group - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Business Acquisition, Pro Forma Information [Abstract] | ||||
Revenue | $ 474,448 | $ 395,245 | $ 928,058 | $ 881,946 |
Income (loss) from continuing operations, net | $ 13,757 | $ (10,659) | $ 32,637 | $ 11,788 |
Diluted earnings per share (in USD per share) | $ 0.97 | $ (0.82) | $ 2.28 | $ 0.90 |
Acquisitions - Consideration Tr
Acquisitions - Consideration Transferred (Details) - National MedTrans $ in Thousands | May 06, 2020USD ($) |
Business Acquisition, Contingent Consideration [Line Items] | |
Consideration paid | $ 80,000 |
Transaction costs | 774 |
Restricted cash received | (3,109) |
Net consideration | $ 77,665 |
Segments - Narrative (Details)
Segments - Narrative (Details) | 6 Months Ended |
Jun. 30, 2021segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 3 |
Segments - Segments (Details)
Segments - Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | Nov. 17, 2020 | |
Segment Reporting Information [Line Items] | ||||||
Service revenue, net | $ 474,448 | $ 282,256 | $ 928,058 | $ 649,547 | ||
Grant income | 852 | 0 | 3,500 | 0 | ||
Service expense | 379,566 | 196,106 | 739,898 | 528,767 | ||
General and administrative expense (2) | 56,347 | 31,199 | 111,217 | 51,994 | ||
Depreciation and amortization | 11,819 | 6,108 | 24,059 | 9,898 | ||
Operating income | 27,568 | 48,843 | 56,384 | 58,888 | ||
Equity in net income (loss) of investee | (267) | (4,425) | (4,770) | (1,875) | ||
Equity investment | 141,163 | 131,974 | 141,163 | 131,974 | $ 137,466 | |
Goodwill | 448,760 | 135,216 | 448,760 | 135,216 | 444,927 | $ 313,300 |
Total assets (continuing operations) | 1,576,198 | 654,245 | 1,576,198 | 654,245 | $ 1,425,913 | |
Grant income | ||||||
Segment Reporting Information [Line Items] | ||||||
Grant income | 3,500 | |||||
NEMT | ||||||
Segment Reporting Information [Line Items] | ||||||
Service revenue, net | 364,760 | 282,256 | 708,176 | 649,547 | ||
Grant income | 0 | 0 | ||||
Service expense | 292,657 | 196,106 | 565,072 | 528,767 | ||
General and administrative expense (2) | 41,621 | 31,199 | 81,587 | 51,994 | ||
Depreciation and amortization | 6,935 | 6,108 | 14,248 | 9,898 | ||
Operating income | 23,547 | 48,843 | 47,269 | 58,888 | ||
Equity in net income (loss) of investee | 0 | 0 | 0 | 0 | ||
Equity investment | 0 | 0 | 0 | 0 | ||
Goodwill | 135,216 | 135,216 | 135,216 | 135,216 | ||
Total assets (continuing operations) | 727,077 | 522,271 | 727,077 | 522,271 | ||
Personal Care | ||||||
Segment Reporting Information [Line Items] | ||||||
Service revenue, net | 109,688 | 219,882 | ||||
Grant income | 852 | 3,500 | ||||
Service expense | 86,909 | 174,826 | ||||
General and administrative expense (2) | 14,726 | 29,630 | ||||
Depreciation and amortization | 4,884 | 9,811 | ||||
Operating income | 4,021 | 9,115 | ||||
Equity in net income (loss) of investee | 0 | 0 | ||||
Equity investment | 0 | 0 | ||||
Goodwill | 313,544 | 313,544 | ||||
Total assets (continuing operations) | 707,958 | 707,958 | ||||
Matrix Investment | ||||||
Segment Reporting Information [Line Items] | ||||||
Service revenue, net | 0 | 0 | 0 | 0 | ||
Grant income | 0 | 0 | ||||
Service expense | 0 | 0 | 0 | 0 | ||
General and administrative expense (2) | 0 | 0 | 0 | 0 | ||
Depreciation and amortization | 0 | 0 | 0 | 0 | ||
Operating income | 0 | 0 | 0 | 0 | ||
Equity in net income (loss) of investee | (267) | (4,425) | (4,770) | (1,875) | ||
Equity investment | 141,163 | 131,974 | 141,163 | 131,974 | ||
Goodwill | 0 | 0 | 0 | 0 | ||
Total assets (continuing operations) | $ 141,163 | $ 131,974 | 141,163 | $ 131,974 | ||
Nutritional Meal Delivery Business | ||||||
Segment Reporting Information [Line Items] | ||||||
General and administrative expense (2) | $ 2,000 |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Deferred Revenue | ||||
Service revenue, net | $ 474,448 | $ 282,256 | $ 928,058 | $ 649,547 |
NEMT | ||||
Deferred Revenue | ||||
Service revenue, net | 364,760 | 282,256 | 708,176 | 649,547 |
Performance obligation satisfied in previous period | 400 | $ 3,600 | $ 5,300 | $ 3,500 |
NEMT | One US State | Revenue Benchmark | Government Contracts Concentration Risk | Continuing operations | ||||
Deferred Revenue | ||||
Concentration risk, percentage | 9.20% | 10.40% | ||
Personal Care | ||||
Deferred Revenue | ||||
Service revenue, net | $ 109,688 | $ 219,882 | ||
Personal Care | One US State | Revenue Benchmark | Government Contracts Concentration Risk | Continuing operations | ||||
Deferred Revenue | ||||
Concentration risk, percentage | 28.20% |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (NET Services) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Total Service revenue, net | $ 474,448 | $ 282,256 | $ 928,058 | $ 649,547 |
State Medicaid agency and Medicare contracts | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Service revenue, net | 207,432 | 151,545 | 410,752 | 332,276 |
Managed care organization contracts | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Service revenue, net | 267,016 | 130,711 | 517,306 | 317,271 |
Capitated contracts | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Service revenue, net | 312,078 | 253,858 | 608,312 | 554,582 |
Non-capitated contracts | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Service revenue, net | $ 162,370 | $ 28,398 | $ 319,746 | $ 94,965 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Accounts Receivable (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Revenue from Contract with Customer [Abstract] | ||
Accounts receivable | $ 206,494 | $ 164,622 |
Reconciliation contracts receivable | 21,006 | 35,724 |
Allowance for doubtful accounts | (527) | (2,403) |
Accounts receivable, net | $ 226,973 | $ 197,943 |
Revenue Recognition - Schedul_2
Revenue Recognition - Schedule of Other Accounts (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Revenue from Contract with Customer [Abstract] | ||
Accrued contract payables | $ 296,717 | $ 101,705 |
Long-term contract payables | 2,292 | 72,183 |
Deferred revenue, current | 2,370 | 2,923 |
Deferred revenue, long-term, included in “other long-term liabilities” | $ 453 | $ 566 |
Cash, Cash Equivalents and Re_3
Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Dec. 31, 2019 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 290,909 | $ 183,281 | $ 41,786 | |
Restricted cash | 19 | 75 | 3,213 | |
Current assets of discontinued operations | 141 | 758 | 89 | |
Cash, cash equivalents and restricted cash | $ 290,928 | $ 183,356 | $ 45,088 | $ 61,673 |
Equity Investment - Narrative (
Equity Investment - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 |
Schedule of Equity Method Investments [Line Items] | |||
Equity investment | $ 141,163 | $ 137,466 | $ 131,974 |
Matrix | |||
Schedule of Equity Method Investments [Line Items] | |||
Equity method investment, ownership percentage | 43.60% | 43.60% | |
Equity investment | $ 141,200 | $ 137,500 |
Equity Investment - Summary of
Equity Investment - Summary of Financial Information for Matrix (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 | |
Schedule of Investments [Line Items] | |||||||
Current assets | $ 557,022 | $ 557,022 | $ 426,616 | ||||
Current liabilities | 529,248 | 529,248 | 324,751 | ||||
Service revenue, net | 474,448 | $ 282,256 | 928,058 | $ 649,547 | |||
Operating income | 27,568 | 48,843 | 56,384 | 58,888 | |||
Net income | 13,672 | $ 18,840 | 36,998 | $ 16,098 | 32,513 | 53,096 | |
Matrix | |||||||
Schedule of Investments [Line Items] | |||||||
Current assets | 143,054 | 143,054 | 143,110 | ||||
Long-term assets | 605,262 | 605,262 | 619,642 | ||||
Current liabilities | 65,564 | 65,564 | 81,920 | ||||
Long-term liabilities | 343,572 | 343,572 | $ 351,036 | ||||
Service revenue, net | 114,333 | 90,667 | 238,372 | 151,971 | |||
Operating income | 4,549 | 15,258 | 20,157 | 13,585 | |||
Net income | $ 319 | $ 8,892 | $ 8,484 | $ 2,535 |
Prepaid Expenses and Other Cu_3
Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Prepaid Expense and Other Assets, Current [Abstract] | ||
Prepaid income taxes | $ 2,995 | $ 14,633 |
Prepaid insurance | 11,821 | 7,577 |
Prepaid rent | 1,019 | 1,196 |
Other prepaid expenses | 10,439 | 8,479 |
Total prepaid expenses and other current assets | $ 26,274 | $ 31,885 |
Accrued Expenses and Other Cu_3
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2021 | Dec. 31, 2020 |
Payables and Accruals [Abstract] | ||
Accrued compensation and related liabilities | $ 43,611 | $ 57,201 |
Accrued cash settled stock-based compensation | 25,347 | 19,376 |
Deferred operating expenses | 9,365 | 8,018 |
Union pension obligations | 8,150 | 6,632 |
Accrued legal fees | 5,337 | 3,228 |
Accrued interest | 4,179 | 4,927 |
Deferred acquisition payments | 3,978 | 3,978 |
Other | 9,176 | 13,650 |
Total accrued expenses and other current liabilities | $ 109,143 | $ 117,010 |
Accrued Expenses and Other Cu_4
Accrued Expenses and Other Current Liabilities - Narrative (Details) $ in Thousands | Jun. 30, 2021USD ($) |
Condensed Balance Sheet Statements, Captions [Line Items] | |
Accrued cash benefit, due from deferral of payroll taxes | $ 20,800 |
Accrued cash benefit, percent due In year one | 50.00% |
Accrued cash benefit, percent due in year two | 50.00% |
Accrued Liabilities | |
Condensed Balance Sheet Statements, Captions [Line Items] | |
Accrued cash benefit, due from deferral of payroll taxes | $ 10,400 |
Other Noncurrent Liabilities | |
Condensed Balance Sheet Statements, Captions [Line Items] | |
Accrued cash benefit, due from deferral of payroll taxes | $ 10,400 |
Debt (Details)
Debt (Details) | 3 Months Ended | 6 Months Ended | |||
Dec. 31, 2020USD ($) | Jun. 30, 2021USD ($) | Nov. 04, 2020USD ($) | May 07, 2020USD ($) | May 06, 2020USD ($) | |
Line of Credit Facility [Line Items] | |||||
Redemption, potential redemption of notes, percentage | 0.40 | ||||
Redemption price, percentage | 105.875% | ||||
Debt instrument, redemption, potential redemption of principal amount, percentage | 0.10 | ||||
Redemption price, percentage of principal amount redeemed | 103.00% | ||||
Debt related commitment fees and debt issuance costs | $ 9,000,000 | ||||
Deferred financing fees | $ 14,020,000 | $ 12,570,000 | |||
Line of credit facility, outstanding | 0 | ||||
Letters of credit outstanding, amount | 17,200,000 | ||||
Remaining borrowing capacity | 207,800,000 | ||||
Line of credit facility additional maximum borrowing capacity | 75,000,000 | ||||
Senior Notes | |||||
Line of Credit Facility [Line Items] | |||||
Long-term debt, gross | $ 500,000,000 | ||||
Interest rate, stated percentage | 5.875% | ||||
Deferred financing fees | 14,500,000 | ||||
Unamortized debt issuance expense | $ 12,600,000 | ||||
Credit Facility, Fourth Amendment, Term Loan Tranche | |||||
Line of Credit Facility [Line Items] | |||||
Line of credit available | $ 40,000,000 | $ 25,000,000 | |||
Credit Facility, Eighth Amendment, Term Loan Tranche | London Interbank Offered Rate (LIBOR) | |||||
Line of Credit Facility [Line Items] | |||||
Base rate for variable rate | 1.00% | ||||
Credit Facility, Eighth Amendment, Term Loan Tranche | Minimum | London Interbank Offered Rate (LIBOR) | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate | 2.25% | ||||
Credit Facility, Eighth Amendment, Term Loan Tranche | Minimum | Base Rate | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate | 1.25% | ||||
Credit Facility, Eighth Amendment, Term Loan Tranche | Maximum | London Interbank Offered Rate (LIBOR) | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate | 3.50% | ||||
Credit Facility, Eighth Amendment, Term Loan Tranche | Maximum | Base Rate | |||||
Line of Credit Facility [Line Items] | |||||
Basis spread on variable rate | 2.50% | ||||
Credit Facility, Second Amendment, Term Loan Tranche | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Unused capacity, commitment fee percentage | 0.35% | ||||
Credit Facility, Second Amendment, Term Loan Tranche | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Unused capacity, commitment fee percentage | 0.50% | ||||
Senior Credit Facility | Senior Notes | London Interbank Offered Rate (LIBOR) | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate, stated percentage | 5.875% | ||||
Revolving Credit Facility | |||||
Line of Credit Facility [Line Items] | |||||
Debt amount | $ 225,000,000 | $ 200,000,000 | |||
Revolving Credit Facility | Minimum | |||||
Line of Credit Facility [Line Items] | |||||
Unused capacity, commitment fee percentage | 2.25% | ||||
Revolving Credit Facility | Maximum | |||||
Line of Credit Facility [Line Items] | |||||
Unused capacity, commitment fee percentage | 3.50% |
Debt - Schedule Of Redemption P
Debt - Schedule Of Redemption Percentages (Details) | 6 Months Ended |
Jun. 30, 2021 | |
Debt Instrument [Line Items] | |
Redemption price, percentage | 105.875% |
2022 | Senior Notes | |
Debt Instrument [Line Items] | |
Redemption price, percentage | 102.938% |
2023 | Senior Notes | |
Debt Instrument [Line Items] | |
Redemption price, percentage | 101.469% |
2024 and thereafter | Senior Notes | |
Debt Instrument [Line Items] | |
Redemption price, percentage | 100.00% |
Stock-Based Compensation and _3
Stock-Based Compensation and Similar Arrangements - Stock-based Compensation Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 1,472 | $ 729 | $ 2,659 | $ 1,772 |
Service expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | 0 | 54 | 0 | 119 |
General and administrative expense | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total stock-based compensation | $ 1,472 | $ 675 | $ 2,659 | $ 1,653 |
Stock-Based Compensation and _4
Stock-Based Compensation and Similar Arrangements - Narrative (Details) | Jun. 30, 2021$ / sharesshares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock options outstanding (in shares) | shares | 279,707 |
Weighted-average exercise price (in usd per share) | $ / shares | $ 85.56 |
Restricted Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares of unvested RSAs outstanding | shares | 20,996 |
Weighted-average grant date fair value (in usd per share) | $ / shares | $ 89.52 |
Stock Equivalent Unit Awards and Stock Option Equivalent Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares of unvested RSAs outstanding | shares | 57,380 |
Weighted-average grant date fair value (in usd per share) | $ / shares | $ 110.94 |
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 | 6 Months Ended | ||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Numerator: | ||||||
Net income | $ 13,672 | $ 18,840 | $ 36,998 | $ 16,098 | $ 32,513 | $ 53,096 |
Dividends on convertible preferred stock outstanding | 0 | (76) | 0 | (1,171) | ||
Consideration paid in excess of preferred cost basis pursuant to the Conversion Agreement | 0 | (48,951) | 0 | (48,951) | ||
Income allocated to participating securities | 0 | 0 | 0 | (264) | ||
Net income (loss) available to common stockholders | $ 13,672 | $ (12,819) | $ 32,513 | $ 1,920 | ||
Denominator: | ||||||
Denominator for basic earnings per share -- weighted-average shares | 14,025,325 | 13,077,596 | 14,151,946 | 13,032,931 | ||
Effect of dilutive securities: | ||||||
Denominator for diluted earnings per share -- adjusted weighted-average shares assumed conversion (in shares) | 14,175,594 | 13,077,596 | 14,329,794 | 13,059,699 | ||
Basic earnings (loss) per share: | ||||||
Earnings (loss) from continuing operations (in dollars per share) | $ 0.98 | $ (0.96) | $ 2.31 | $ 0.19 | ||
Discontinued operations (in dollars per share) | (0.01) | (0.02) | (0.01) | (0.04) | ||
Basic earnings (loss) per common share (in dollars per share) | 0.97 | (0.98) | 2.30 | 0.15 | ||
Diluted earnings (loss) per share: | ||||||
Continuing operations (in dollars per share) | 0.97 | (0.96) | 2.28 | 0.19 | ||
Discontinued operations (in dollars per share) | (0.01) | (0.02) | (0.01) | (0.04) | ||
Diluted earnings (loss) per common share (in dollars per share) | $ 0.96 | $ (0.98) | $ 2.27 | $ 0.15 | ||
Common stock options | ||||||
Effect of dilutive securities: | ||||||
Common stock options (in shares) | 115,335 | 0 | 130,819 | 10,347 | ||
Restricted stock | ||||||
Effect of dilutive securities: | ||||||
Common stock options (in shares) | 34,934 | 0 | 47,029 | 16,421 | ||
Continuing operations | ||||||
Numerator: | ||||||
Net income (loss) available to common stockholders | $ 13,757 | $ (12,518) | $ 32,637 | $ 2,423 | ||
Discontinued operations | ||||||
Numerator: | ||||||
Net income (loss) available to common stockholders | (85) | (301) | (124) | (503) | ||
Preferred Stock Conversion Agreement | ||||||
Numerator: | ||||||
Dividends paid pursuant to the Conversion Agreement | $ 0 | $ (790) | $ 0 | $ (790) |
Earnings (Loss) Per Share - S_2
Earnings (Loss) Per Share - Schedule of Antidilutive Securities (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | |
Stock options to purchase common stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 62,820 | 597,842 | 49,406 | 604,394 |
Convertible preferred stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Antidilutive securities (in shares) | 0 | 633,454 | 0 | 715,657 |
Earnings (Loss) Per Share - Nar
Earnings (Loss) Per Share - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 4 Months Ended | ||||
Jun. 30, 2021 | Mar. 31, 2021 | Jun. 30, 2020 | Mar. 31, 2020 | Jun. 30, 2021 | Mar. 08, 2021 | |
Earnings Per Share [Abstract] | ||||||
Stock repurchase program, authorized amount | $ 75,000 | |||||
Stock repurchase plan (in shares) | 269,407 | |||||
Treasury stock, value, acquired, cost method | $ 24,590 | $ 14,450 | $ 2,887 | $ 7,299 | $ 39,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | |||||
Effective income tax rate | 29.60% | 28.00% | 26.60% | 9.20% | |
Income tax refunds on sale of business | $ 30.8 | ||||
Income taxes receivable | $ 27.3 | $ 27.3 | $ 27.3 | $ 27.3 | |
Tax benefit | $ 11 | ||||
Increase income taxes payable | $ 3.5 |
Transactions with Related Par_2
Transactions with Related Parties (Details) - USD ($) $ in Millions | Feb. 10, 2021 | Jun. 30, 2021 | Jun. 30, 2020 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2020 |
Related Party Transaction [Line Items] | ||||||
Stock equivalent units outstanding (in shares) | 1,344 | 1,344 | ||||
Stock option equivalent units outstanding (in shares) | 200,000 | 200,000 | ||||
Stock Equivalent Unit Awards and Stock Option Equivalent Units | ||||||
Related Party Transaction [Line Items] | ||||||
Award vesting period | 1 year | |||||
Awards granted (in shares) | 725 | |||||
Stock Equivalent Unit Awards and Stock Option Equivalent Units | Accrued Expenses | ||||||
Related Party Transaction [Line Items] | ||||||
Liability for unexercised cash settled share-based payment awards | $ 25.3 | $ 25.3 | $ 19.4 | |||
Stock Equivalent Unit Awards and Stock Option Equivalent Units | General and administrative expense | ||||||
Related Party Transaction [Line Items] | ||||||
Allocated share-based compensation expense (benefit) | $ 4.5 | $ 4.5 | $ 6.5 | $ 4 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent Event - USD ($) $ in Millions | Aug. 03, 2021 | Jul. 26, 2021 |
CareFinders | ||
Subsequent Event [Line Items] | ||
Business acquisition, percentage of voting interests acquired | 100.00% | |
Business combination, consideration transferred | $ 340 | |
Business combination, net present value tax | 34 | |
Business combination, consideration transferred, net of tax | $ 306 | |
VRI | ||
Subsequent Event [Line Items] | ||
Business acquisition, percentage of voting interests acquired | 100.00% | |
Business combination, consideration transferred | $ 315 |