ModivCare (MODV) 3 May 242024 Q1 Earnings call transcript

Good morning, and welcome to ModivCare's First Quarter 2024 Financial Results Conference Call. [Operator Instructions]. Please note that this conference call is being recorded. I will now turn the call over to Kevin Ellich, Head of Investor Relations. Mr. Ellich, you may now begin.

you and ModivCare's Webcast. thank Earnings Quarter and Call Conference morning, for First joining XXXX Good

Chief Joining President Officer; ModivCare's and today Chief Officer. me is Executive and Heath Barbara Sampson, ModivCare's Financial Gutierrez,

Information I Before the will or that Reform these may other press management statements regarding Act. want we statements forward-looking from to get SEC. to everyone differ risks, today's and make Securities that Private release the contained results company's factors involve is cause events in with remind materially under These the filings actual call, during Litigation expectations. factors and started, uncertainties today's in

We after will will hour be of call a call remarks, their and most concludes will of on additional definition these open the results with provide review non-GAAP measures to directly comparable begin Heath Barbara financial this available Heath. replay reconciliation conference to GAAP to non-GAAP questions. With posted included to and website, release also opening applicable, press will financial and financial in for then I'll measures our our that, be measures approximately extent Form A information to is A investors. and X-K. discuss the modivcare.com. This the we'll and will over turn financial morning, X today's guidance, call call our

a run our an impact cash conviction and flow of the that on quarter the to X% continued are adjusted quarter, million million between increased targets The XXXX XX% conversion made These I'm pleased financial $XXX in expected range. debt outcome EBITDA transformation call. of revenue and earnings to refinancing. the was excluding $XXX exit XXXX and with our initiatives adjusted we and morning, quarter $XX our in joining you guidance of XX%, can thank the that first Good from free fourth our progress expected efforts. provides line EBITDA results million first our achieve with for report strategic of rate and our

advancements Over the culture. has past differentiated X underpinned our years, our This technology margin, competitive enhanced positioning. mission focus no has significantly our operational and sales improvements, on no

As the improving as being structure tangible KPIs financial XXXX, in now results our cost are reflected we an growing our as transformation complete improvements with sales. this in in well

Medicaid sight in slightly Additionally, of line second redetermination in to than and better and is trajectory cash earnings line providing expected flow. of our concluding quarter, the

notes. of One top our priorities our XXXX unsecured is addressing senior

refinancing is it's premature specifics, the underway. While to well process provide

debt our balancing refinancing focused are overall of options and particular terms Our efforts cost optimizing on of in prepayment capital. capital flexibility,

robust to structure sales to grow brings our deleveraging of Medicaid also refinanced recognizing a the and We health care our remain committed our normalization pipeline redetermination significant our working with be debt optimization, shareholders. With profits our expected capital into insights along the this positioned clear and balance business. soon, are deleverage and to sheet onboarding, effects to continued we cost new on effectively and value

million Additionally, our continue provide March state expanding the our in quarter, we from in by a After in XX, NEMT contract avenues to Mississippi momentum other assets potential multiple minority renewing $XX state monetize contract to MCO contracts. delever. In ACV equity will May. secured our Matrix opportunities and we or first in value, annualized including State Medical contract

to in issues. we was us contracts transformed positions and legacy strategy, largely again, XXXX, for our expansions, several one notification multiyear year our state of very have both performance retained received and well. Since renewals a new by status business our backed with our extension wins successfully record With due negotiate this state we RFPs solid with a track the go-to-market incumbent as expected EMT also We loss largest to all state renewals of and contracts. last which

wins various in MCO also We regional from national contracts. and secured million XXXX $XXX revenue across new of annual

this progress diversifying key our innovation rather at when in reduction past X that less, transportation volume of contracts ability rates, NEMT our a a partner. from loss capabilities. remain or customer current years satisfied materially we proud looking provider providers share. by large to than largest began However, our the Despite payer payer's our and XXXX due and offset its are performance not we to yet Nothing win quarter and individual first this, our the ago a was expand largely again complacent market

The update very had XXXX. Next, upcoming refinanced Medical. Matrix its improvement debt, is with seen Matrix maturity. an the on an financial growing were well. recently consistent I'll which Matrix's business throughout provide results

are We in making. of to refreshed half XXXX. Similar Along home nationwide the I have health. Matrix nurses at platform said, expect crucial increasingly in minority and over positioning have first national half they U.S. addressing that in with the significant team to of year. our advancements will we financially technological with X,XXX management the monetize stake equity person care Matrix, are care landscape. we of our in timing supportive the XXXX network confidence whole our made its opportunity and leveraging platform the or Matrix That continue the innovative the to last the The progress latter evolving of partners, health has the of services continued versus strides are value the balancing our and sale

care toward chronic basic than providing our populations, offerings services. shifts market service demands high-quality for The services conditions. As supportive more to essential vulner are now care managing health

enhance actions expect and that customers lower satisfaction. outcomes directly Our costs, improve and insights member

environment, customer clinical point us and providers personal share. secure to lose and monitoring care legacy the leading evolving are helping providers, technology NEMT investments solution advantage industry market the competitive significant needs, as regulatory to Our adjusts in

a in interaction engagement and which new in-home monitoring or for revenue XXXX us tools satisfaction connections hard manages in services creating model, chronic combines and digital is compensating to only like meaningful this effectively services. multiple and by standout with transformation. revenue with mobility conditions, rates but win monitoring a significantly Furthermore, also of the On impact is homes for our care costs, reducing stations care our members hand, approach omnichannel of devices from community outcomes improving centers, and and in our This contact our enhancing projected other hybrid beyond. reach channels health our care core not transportation human with boost member result

We are COVID's addressing challenges actively from structure. impact adjustments capital working necessary cost on our to the and

our Our advantaged and NEMT more ongoing but propelling only efforts our revenue-driving flow scale. shift facilitate to deleveraging, us cash not to platform, additional capabilities of while a boost the growth segment, enhance competitively also transitioning this

each scale and value. investment through enhance Beyond our unique hold which value platform, our business our in segments of shareholder has substantial Matrix, possess optionality to and the X minority we equity

address I'll highlights, NEMT. Now starting segment our with

cost savings scheduled. Our initiatives as are progressing

metrics million $XX We at are contact which are and technology purchase is advancements. as in management; The to savings expect in or least per our focused on which trip as providers; driving the savings our select other interaction our annualized is like services, transportation services, achieve rideshare, of on savings multimodal These well high-quality driven mass shifting standardizing ride is actual focused and cost well with and the and trips this to here will member NEMT XXXX. the beyond NEMT alternative unit transformation, digital transportation savings is by approximately savings providers in-year $XX are transit, The our providing automating KPIs assignment are cost in including cost X of call integration areas: and more which million year savings reflected come members lower-cost centralizing which centers, and The ratio. experience, trip. to from as strategy, trip in as that and Transportation initiatives our options. our trip

I actions projection. sales been actioned than slightly and for the continues for track run achieving in we our better reiterate identified targets line want this savings XX% initiatives year clear and standard to Medicaid or have are and have and savings, beyond. our rate redetermination and to approximately

next of is personal in incremental our As an a industry to million Redetermination to of care. in the will and an XX% XXXX incremental expecting $X due over adjusted an performance. Shifting impact terminations we the reminder, in be coming the in XX% procedural quarters, will to the to second is members expected XXXX. and to be impact several end second to $XX reenrolled the XXXX. will EBITDA quarter, impact million flatline million financial were is that $XX half of financial disenrolled tailwind The which had

higher-than-expected focused implementing and system. compliant and centralized The increases and synergized were higher strategy by impacted critical implementation, member wage referral service a our that that matching will transformation shared be first this is embedded while is quarter centralization on platform enhancement results caregiver costs year. A sophisticated in is

help and these we With efficiencies, growth. improve which can place, drive in will operating consolidated systems processes

to XX% Medicaid rate growth line to X% the We margin expect to care known final services, with of personal to EBITDA as services. the revenue ensuring week, the our rule exit long-awaited and in otherwise year for X% CMS issued adjusted of long-term XX%. Last XX/XX rule access

XX% X provision goes maintained in implementation time the change before the could challenges rule, cost the increased are and before we the the calculation. pleased While was clinical rule that legislation years We anticipate final the X XX% included also be into nursing even legal line will implemented. that pleased we were from in it's to effect. it Ultimately,

to be we operating any impact and able efficiencies to offset However, growth. expect with

from person by Next, directive of a care or choice business. member member can path encountered program, a is our challenges be consumer whereby small relatively the state. New a part This of City or the a taken has their York family of

there event touch to monitoring, or participate to engaged. home are to to believe seeing payers In continue the progress that engagement human we remote see model we we by that and traditional we driven provide. In care changes, change good patient more digital and performance, model. in hybrid we However, convert shift services with access as are staying the our and care members could solid growth an we're we

savings, programs streams The over to generate sales earlier, high PERS monitoring have engagement nicely us to engagement. cost the NEMT innovative delivering are model. with member and and this contributing As expand. and are noted results to Currently, revenue our specifically improved to that payments outcomes XX very we customer for more solutions growth promising

to conviction XXXX scale in in flow debt. beyond. We financial prepayable important generate and the quarter an to achieving meaningful our XXXX expectations as and and cash our as was revenue first XXXX refinancing step half targets well free with Meeting year notes continue our the the second our in of expect towards

have throughout strategic consider in We and structure avenues positioning our will continue competitive shareholder optimize long-term the capital our confidence drive to execution we year, and and to value. available strategy,

unchanged, rate debt flow of impact the Our of to a expected the XX% rate cash remains free with $XXX the in EBITDA confident of million outlook year are run quarter achieving excluding conversion adjusted XX%, for our fourth and $XXX to we million refinancing.

revenue, increasing the and our the have of we Medicaid As a clarity of lower transformation, cost on we and redetermination. final approach seeing stages we're structure completion

and third it quarter needs volatility decrease our flow the working us, to expected and and With cash capital the and to unpredictability in peak the expect health behind are hard their capital dedication second for and It's care quarters the fourth ModivCare members to as in team as special utilization like all thank our that to last challenges be. we've over place navigated months. change several a stabilizes. I'd and work funding make

details turn additional our Barb? share I'll over call for Now XXXX. outlook results the financial to and who will Barb, about

you, Thank everyone. good and Heath, morning,

and revenue First driven million, PCS NEMT growth to quarter RPM increased $XXX growth. X% growth, by X% XXXX year-over-year X% X%

and loss diluted share. million $X.XX $XX million adjusted quarter per was net or was net loss $X.X First

guidance million EBITDA range. in X.X% our with adjusted or quarter was First of $XX revenue, line

expected due losses occurring to As subsequent quarter timing was we primarily being NEMT contract with contract of the wins the discussed quarters. quarter, last in the in in first decrease to onboarded EBITDA quarter

and purchased while per sequentially primarily million payroll segment revenue per million. that volume first gross lower services review lower as flat NEMT favorable than incrementally more other slightly a monthly utilization announced NEMT decreased due to increased. previously mix quarter membership. due modestly of mix our trip expense related to sequentially benefited Trip financials. higher and per points, decreased $XXX increased X% to $XX.X expected. trip revenue to and decreased contract pricing membership quarter-over-quarter, and revenue trip was XX% redetermination. increases Turning X.X% settlements margin from to volume Average XXX NEMT year-over-year Notably, basis due losses successful trip, decreased revenue Medicaid per changes. at $X.XX, increased negotiated contract trip Sequentially, and execution X% were expense of to to even

at evidence $XX in is trip. NEMT quarter's savings last was in payroll and expectations expense unit our metrics that This decline lower service revenue. which progressing per following EBITDA purchase million expense of strong with line decrease includes services cost per initiatives cost our trip or and adjusted quarter's are other stable X.X%

of second see well new contracts initiatives. improve the as due the and quarters We expect of cost margins onboarding the in to execution the year third throughout as to our

During members. by impacted the XXX,XXX first was approximately quarter, our redetermination Medicaid membership of

contracts Overall, Medicaid impact we we in their revenue line adjusted states by Based information, first full-risk period. million impacted Our million previously million adversely redetermination versus $XX $XX $XX quarter better to by EBITDA revenue respective $XX to by expected. top and adjusted on X $X EBITDA with million. million. and are $XX now million updated through million of redetermination redetermination expect slightly than original XX% to is tracking approximately Redetermination range our $XX by in XXXX to

members starting were XX% Additionally, procedurally and who XXXX. disenrolled to states are MCOs of reenrollment XX% eligible in see to

hard timing the Our modest guidance to includes predict. a but reenrollment, of amount is

Turning to Home our division.

X% in increased million, growth hour. revenue X% year-over-year $XXX and in care revenue X% quarter First hours by to growth driven per personal

driving to by make wages converting was York. increases quarter to The progress hours continue minimum rate applicants reimbursement in growth increase favorable and largely steady We in this caregivers. driven New

$XX a or we tapering subdued due expected However, was rate X% the to income which expect of growth reimbursement EBITDA care certain in lower was the as million as outpacing primarily remainder wage environment states year. than well of increases off. for rate Personal grant adjusted revenue, more

that several in Lastly, will benefit rate reimbursement second didn't increases X. the quarter. be fully effect until received March of we increases these take The realized

an leverage expected efficiencies we for to in of $XX moderate increased wage X% margins range million. year. RPM to the forward, will to revenue EBITDA XX% expect returning and Going year-over-year to leading G&A increases drive operating

to of expect new our toward in and Advantage declined and further Gross year to growth We and XX%. accelerate costs. due churn year-over-year sales wins deactivation contract eligibility lost of higher target margin related primarily who Medicare the sequentially, revenue remainder referral the business for growth our higher members to

was first adjusted churn seasonally for than margin. $X.X higher is anticipated. a quarter or highest quarter The we the the RPM year, was XX% quarter million but this EBITDA

the Our to in business trends slightly normalizing, we mid-XX% continue and during range margins expense service despite are RPM QX. expect higher

our to sheet. balance cash Turning flow and

approximately expenditures first of of X% free by working revenue. million, was operating NEMT capital the cash activities million quarter, $XX flow provided which capital were net $X offset of cash $X consisting of was million, During by in dynamics $XXX We increased receivables quarter-over-quarter by to increased $XX flat net payables Contract million. by receivable position sequentially quarter expectations. a our sequentially. million to million first $XX in million, Contract with of the line million. ended $XX essentially $XXX

our balance Our importantly, March $X million. sheet balance million of of as increased revolving maximum credit by $X.X We flat facility to to $XXX bank-defined first covenant X.Xx leverage with debt remained in the XX. net quarter our million $XX on of But of the as net leverage and with XX sequentially net debt ended approximately ratio against our increased X.Xx. March billion cash

process the we unsecured Heath of XXXX in refinancing are notes. senior stated, As our

our priority prepayment that cost capital. We to support of pursuing to for managing our provide overall solutions delever currently flexibility financing are while

are but while expeditiously to refinancing complete best outcome. optimizing provide the will progresses, updates as focused we We the it

we reminder, the certain continue negative cash flow to and contract payment our of second a in half XXXX be free the of includes As of expect semiannual settlement first interest. cash as quarter to payables

being capital positive net adjusted on expect free to of in the cash. EBITDA and be in of improvement a working We flow based half the the year cash second source

billion decrease adjusted conversion to XX% from expect of revenue million we excluding of $XXX of XX% in a the exit debt expected XXXX our in to Free million. $X.X We by adjusted We refinancing. with guidance billion range may flow impact conversion EBITDA maintained that $X.X to approximately EBITDA flow will the and $XXX XX%, range year cash the result refinancing. to of the a cash as free our

Medicaid For the a redetermination line here our expectations. in items consider. to remainder tracking are for better qualitative slightly of few XXXX, than is you to original

midyear. to We is in conclude expect anticipated the by members to lose second redetermination quarter as additional

earlier expect savings positive offsetting $XX and on to continue range onboarding adjusted Cost costs. service digital the our from of We and be for $XX net NEMT development driven impact the attrition of million contract by repricing of the from XXXX, expected in wins to in to investment business year. slightly the EBITDA are contract a net million,

to to health We headwind Adjusted mix a within expected contract utilization Home grow for expect in EBITDA as our millions the normalizes. high be year. utilization is single-digit care from the of dollars

G&A. We expect to to $X for million invest innovation strategies year and in million $X the

our ramp summary, and in segment, throughout first our in savings, a sequential financial progression impact remaining expected. from to we benefit from adjusted expect we modestly quarter In quarters Home the to we and for our EBITDA the improvement expect by redetermination year, set improvement Over full to driven These steady diminishing results all as cost for new a guidance. XXXX, results implementations, and with year the foundation results line than progress Medicaid year. contract in consistent contributing see were solid better we the greater

the have done and serving and our thank focusing and will near that, to our members We please our expect the and on in and open execution we term, their of members. With to team call for for all refinancing operational results. I'd clients for like questions. continued improvements passion dedication operator, driving continue

[Operator Instructions].

from Securities. CJS Labick question with Bob first Our is

things a Yes. on normalizing us to solid Congratulation for here. start

a results, perspective, at lot I to I of better least So NEMT. expected, overall, wanted better than start feared. there. our moving from But were with Obviously, parts think than

macro mix changes is model to you a that shift, contracts contracts the you're new on and biggest The the shift the redetermination winning. lost from really the the there. to impact start good on the So then

this P&L we of thought. year, plays So offsetting kind directionally how and maybe service particularly out purchase help maybe where costs the understand utilization from in us that

we drivers think different would the shift? X to So this should redetermination the mix and with those change How about key how the contract prior shift, be expectations?

And months Yes. in we was going that in driver marketplace then Well, expect Medicaid it it's we the expected is where the fears big redetermination item, material. yes, to to the And -- main is first as it's item are be but it with now QX. us still most and XX the what hitting secondarily, on done right? where there was right be, hit right you be. ago, QX. in And we we'll for on it importantly,

because and full down, The really other affects goes a the and contracts big that membership -- risk our driver. that's

The mix about that talked change. item is we the other

disclosed quarter QX. we that number large through a these we've and members we or those as last our lost that coupled new continued months the wins over had especially coming sales off last into And has Medicaid And So of changed are one mix. onboarding as we payer. this so redetermination XX with

diversity for there volume came lower utilizers, hit of large and a of volume the large specific because came because matters. big Medicare that redetermination and that if I if on where be give, utilizers. -- contracts a that then lot that So mix out. it's on around have, of Point change our And it to realize know averages or A space that in obvious really Medicare, dual are was people what within are lot that could utilization. out Medicaid, that example, being, differences the state all within has utilization. space don't lower The though the a you in high we depends mix between typically we you are And -- dialysis. everything the big main there's heavy like point

where mathematical with higher, the So to from expectations. really But that definitely a change, the actually macro is from a in all, in point, you'll it's line see utilization expectation. line important is from the you up. our yes, probably But our health that but is, That's big standpoint, care up. and with utilization most perspective

remember, the you and and at So usage of we XXXX, that expected the if complete end we care normalization of XX%. had health about at utilization,

mix will at XX%. this with Now expected, as it change, about be again,

with and looking P&L, within change, mix there's our it, model at But that hit So line purchase big services. things. that on other you're in things you when change happen

have significantly based in change So mix type contracts come within on the purchase of will services down the that place. this we

those able our factors make P&L of better will -- So the you when are be end X line adjusted XXXX. at be and predict what to to is in going

touched makes success. That's more, and talk can Super. or really sense And we Okay. little about too. helpful then this there. maybe the on a Congratulations it you on

another obviously, won bunch sales won you you or in couple first a Another the a quarter. year, last more when, contract

mean about talk potential pipeline you just Just visibility wins the I surprise losses up. because avoid already wins losses? how's We Or the great. your have want lined to here. Any going are forward?

So there, please? maybe visibility

capabilities that And day go-to-market through happened. this building all building customers' way a first beyond proud solutions great we're product that organization necessary we've new then, to in platform things trip the We the our right organization through just through Well, even can the lot drive there then there's all to could to the our from again, going have really, that's think as team meet our of. that that, an Yes. the and off, But our needs. entire that marketing really access people the spend that the on sales a that added meets needs. ensure of customers' about transaction care strategy,

sales continue the last the year excited the year with were it's sales that started in even of comes the -- of that go-to-market about So transformation this that strategy, and up. our rest I'm results. really that, resulting The how quarter,

strategy. I organization We've of this couldn't done. proud be and So the has go-to-market in what more capabilities really a culture changed

still is that from items them. then with and a partner innovation to diversify away loss and quarter, the us. need and -- largest again, the last last what do we're quarter, NEMT the Again, legacy specific them I'll broker that loss for of the So I just -- said payer, repeat had lot with to

our will. we're I'm did wins outpace But It -- we doing what anything losses. not now, on sure based right this quarter. lose So be will would we our

in continue. So expect I And good feel the pace that results. really is up about It to team. I showing the

XX% back and PCS, of pretty Okay. the generalist, a But terms explained the what happened quarter you, on in in Super. the me, proposal I to expectations one relates it gross as help I'll but margins would simplify from kind awesome. to you, get that just don't nursing clinical the line. know margin input. on that year-end. relates me, the could as of particularly in just you be CMS, for for I and well think, simplify But how it Last one for message maybe

first up great especially off, challenging side. over months platform. PCS a but of last these when focus Well, very new grow building made last the this. have We're and in since a there to Yes. our really there doing This and leadership rest businesses we these on individual you months of organization scale individual the X locations XX and was over with great historically team that Anne work, and have of Damon lot and the were

investments. But of margin been has growth platform the focus, right And get of at level question with knew we to really, out. we your around back that the right do then that's that the and to XX-XX expect came So this after these proud it we're to there. we the building finish

impact, this if be the of nurse manageable costs implemented, what really it'd costs think was gross is now, Most be was or us. really is in and is the XX%. helpful need that these clinical these are that. including until definition being again. X very XX% for it proposed So that there'll there for But we around be us And to years cap from the that is doesn't challenges very implemented margin importantly, because beneficial there something do

that So a covers by the it good those clinical And gross at if you historically that of costs that was include outcome a nurse margin, including XX% margin, costs a from well. because really to we're lot as XX%.

do how strong short, and in grow even to of spot a get that in if this feel as really was really it years we're was story like place just margins. from in we it good X a We're to a large-scale maintain good develop long now, defined, believe we will And company. change. rule and So position because

Our is Raj next Stephens. with question Kumar from

Just kind segment. the of dive deeper to wanted into Home

in kind just given kind on a XXXX like terms just wanted Just your half back of see like like that contract it, those redeterminations PC story ramp towards based implementation if RPM getting more does seem NEMT path and there's a have smoother to commentary a differentiation targets. wins, and of but like of to may of have to new of

wanted get like a confirmation just just the to kind in on through XQ. And for walk that. just of us then as follow-up, of kind So versus acceleration membership I RPM

Yes.

costs of has the of we PCS specifically in segment those had explained. do we and costs expect of what made PCS Home there So which will some we've to the QX, A added in Actually, do be up this we because RPM. that lot that come that to will with with out. of transformation,

expect the as well. accelerate addition, In with actually growth the we building, team gelling on new platform that to we're

business came off that well the difference that than and had our stayed within MA to right, a growth the of client mobility large that we the as they is didn't So QX timing MA we mobility. X -- win a expect -- as and that out. But some is still cost we much business, as between so lot the of on sales on. costs smoother, we and is that have some in getting in there is related the because There RPM it of much is as volume RPM. didn't still a but timing get our PCS

we as the targets expect not that, and we as that come to at -- is, reasonable QX will well. out. But that you're a of it's hit slope out NEMT coming ensure accelerate our plan So that we

make? trying XX/XX -- then to as thoughts the a XX% kind gross double-click And XX% on changes term. talked the like still second if based to just of question, the the baseline of margin you -- adjustments want definitional Or has can just you my updated And target on past Great. in think a updated on know what make, that I can kind get given to do you like And adjustments to the there's that's your you term? longer guys just longer company provisions. think just achievable like

Yes.

depends lot it make what the people That's as why states depending you're country. a it -- size of gross is all your there sense So margin fits are X hence, going in, this, to what across a not around be. on arguing

For our our XX%. XX.X% was gross states, to in us, historically XX%, are where again, we around margin

the And to So than manageable nursing really, I'll cost much manageable current really that less down. centralization, have. But the the there's only the cost money, get demand XX%, proposal require very -- clinical have place. X% -- which last gap isn't to compliance, is under down or the in doing that we've months, for construct in the in and costs we'll having as X%, lot better provisions we definitely again more XX the we that that's been of it's other and go than we That that stuff less better repeat reporting. and that

scale leverage -- So be off of to and get we we'll and as then ours able well. that as grow

we that good XX/XX grow and will to will X through that think believe possible So the margin the from always did now. out it EBITDA and that. be said. that's laid even come in targets But after those XX% place. years hit we've we're spot rule don't to in a is manage definitely XX% EBITDA that Again, we've We

Brian Our from Tanquilut Jefferies. is next question with

for have Phillips on Brian. You Taji

to you bit in showed outlined in initiatives. realized this And the ability $XX So Maybe being gives kind out for in the million first year? but on savings the us bridge to the million to lay on and $XX realize these tell to deeper $X slide the a you you happen in dive you another kind quarter, needs throughout then the else million deck, left savings cost of little what in clearly of what to you can your confidence tank. execute maybe

Yes. It's part the this about of a shows critical There's of slide you'll run that is see XX% another there year. that remainder rated.

this bridge, into off run then good really a sequential coming million quarter is $X remainder a that is we've quarter, lot bridge a a done XXXX to lot So year was lot the are the had we've which before, and it a identified executing is show, savings. those of right? of So that The rate actions of driving though even we of work. good of And on.

So as year. million to growth beyond the a because But we putting $XX of in that of that million about the trip enter because be now, year even feel And XXXX. the rate with million to a and will run and then $XX million in about utilization initiatives getting the lot volume that, I expect had we as in well. $X $XX it we do that benefit are good full

to is $XX-plus still So identified a had. and yes, about it's of of but we execution needs work run that happen, XX% it, we've that that from have million again, there lot previous rate

personal And care. just Great. I appreciate back the on color. then

this comment to quarter? the triggered working Maybe you're has reimbursement talk And how you increases. to magnitude purchased services, pretty like want guess, stabilize this line that I can Just go how I delayed about you're shortfall expense the back much these about to we're how expecting those? obviously, -- of

Yes.

is bridge delta it So the million from reimbursement. you when of that out, a $X $X puts million-ish all kind about net -- you there see in it about that maybe

reimbursement rates we to expect So get. that the

and specifically leverage. synergies So in we targets out get and And where leverage another get we that will G&A just couple expect expense of the us which a is getting to service in that, other efforts service have. grow expense, on in higher and the of we $X we efforts and know centralization that is growth allow automation states the is we of based that have couple around us the after million, the also million

So we be we had and to we have get able margins to that's growth rates prior. the it expect plans, that back down. to and how breaks And

with from Chickering is Pito question Deutsche Bank. next Our

questions time any multiples being ranges we're gives sort Matrix, that, on for X first or of sort it's confidence realized. here. given not of strict I me asset you that here, that think the Matrix. of as the XX asking questions monetized next monetization like guess I but of now this So guess, you over some for of can think two be you've one. And the transaction months? I color on then what prices where sort

the every here am for then about, similar is specifically proud my what had the the tremendous they've talked we're meeting how there. it's go-to-market, Catherine same going CEO last her done Matrix. we months, the to Well, a of driven. and Board everything, team, I and months. and Yes. around X Catherine weeks is I just team couple last -- and And what a really, it's ago a XX of is over that through over work

their other the are is that has care in the conviction change also I really platform and growing financials had. to and to more And the and then the they've the results or more leverage in implementation have down and they're really the the team gets that it as technology well, So outcome home stable. building there home, in

together, and and of team as sustained on couple that care things success can there's this are the X,XXX a that they you lot importantly, those nurses health value has. the system. then, that homes, And have people's again, So X in

a So lot of -- inbound. there's and

of and to lot them to that. confidence grow that another a able owner beyond have we get So we'll be

gave which do ability -- is So our to guidance why I around confidence that. that and

are the the that they of good great going be multiples because So effort to had.

I'm you the not to Obviously, this have multiples. above it's multiple, question, But get not and to well that's to be. a be services and signify you going before, kind we possible. to standard may actually on health going -- this care So asked what is Pito, No, XXx going they're going hey, get comment to which we're if of EBITDA.

that the really feel it. to and execution. I good We'll thanks And get done. team So about it again,

kind us quarter walk be guidance Okay. million. sort through at looking second fourth then Great. just quarter we XQ should of your to Can results the terms of the touched getting year, those far then of key but better? you some sort questions, see biggest of of margins as throughout sort the on of improvements? as where biggest margin margins to first of XQ what EBITDA the just we drivers versus in the how your you like are question, bridging $XX just do And And

so what think back well, said to Yes. similar in even of hers, Well, in as last quarter, the we ramp the year. said part I the is and -- Barb

on here that we sales -- implementing stuff The focusing really gets first. and had. the mobility the I'm it so to And

I again, are are those in QX. sales on sold, So on those already some expect them we've and and more now, to that come coming

also that's the And being So to execute QX still then we on, why back-end ramp component But post again, really from And still it QX redetermination that of the item. in there. show within a of would perspective, have work year. an normalized Redetermination when done kind do and the is last the and is to Medicaid is important growth the done XX% in that is run and half as the weighted needed done. cost out. QX the we're back but then rate

with before, exit NEMT. is EBITDA we too. ramp And going consistent then said we growth XX% steady in personal and at to do then what exiting the be around and So there, range that rate have in care, rate that targets to X% EBITDA monitoring expect

hit lot QX, It's that driven though that will mobility. QX So we've in ramp, it the past specifically things that target. those QX, a we those of QX is ensure it's a done

JPMorgan. Parekh next from Our with Rishi question is

walk through MA NEMT. between by my What us was within hoping services the question, those are exposure divisions could utilized you that through your I various members? -- NEMT On specifically currently and being first

Yes.

We have I pot. MA small for deck. a our it's XX% XX% of is It's XX% think the -- -- about us. is revenue in

other in then And So again, personal pretty no its to monitoring it's on care, on higher, exposure that's -- are. where the good client. monitoring, MA. about the And X concentrated we side, feel projections segments, those and there's

lot critical was and and continues higher to that within across was in transportation, grow But So it a of of QX. a we lost XX%, benefit before that NEMT, that -- part all that what grow the M&A market gets it different well. Probably expect in back from it's biggest will talked Medicaid. win little and we and than about thing MA I to a what a as earlier, we perspective, bit is

member have you how is that understand So trip really when trip and and the understand that to was taken taken.

insight and lot have you you if we put that those right of technology, can the at a So place. member in cost service the in right efforts

is payers across And So it's to just Transportations, issue. of supplemental -- for but be cut. the board as that top know, one are you a to continue. benefits MA many going them going

XX%. So big forward. We we and grow, our it to manageable though and business it's as do a move part of expect it's

Is of what offices? And business, sorry, mostly for are it within the what dialysis, -- trips? physician are... the NEMT trips Majority the

for Dialysis for the MA side. is duals the volume bigger within the dialysis. not. There's will is us, MA that the in have Medicaid that so Well,

different what of there over but normal is trip are in less with care, So kind adult it that you'd it's the of with people expect your more the day but is and XX. types, line breakdown dialysis

renewal And believe a contract then later And can up as believe the going. to with around Okay. it you an visibility I'm your be process it? Jersey some sure I What's your still sizable contract. just contract? how this Can that RFP. Great. August. not is quantify if provide Is is idea exposure? also exclusive us expected to you this your I under New contract that's for currently is fairly that's

Yes.

in is said and critical you good what's years. New one Jersey a the the that had in we've about our many of important So we talks a have slide that renewals for business part. many, the And deck which state customers, is

more within and of Jersey their really We do that have part them. an transportation are their with ensuring we a their the members strong just And working Why? commitment. the community and for providers we're performing, relationship than Because on we're fulfilling are trip. New people important

point we're well. So performing Jersey within is New my really deep

very have We platform. low-cost a

boxes. all and we So meet check the

well then And the some X ability even good we business months, renew what as our script, new business. to to said gaining as all state there of very in win of business rate we thing because is feel have So gain our last renewals the XX about state the done other I strong. and over in our

this million than in So that I we continue more that of of have that to expect we win $XXX that year, expect I will lose. renewals

there off comes but until -- that, from or that So again, XXXX. any impact something are both don't this on expect I year. positively RFPs if those is negatively any changes,

PCS. question last a Okay. on And just

just multiyear might it better you Or just an process? sell. of this where you process? asset comments like do terms of view that area that look do are may view a made Attis in process a be as Would you with to to Matrix noted has sale obviously understand also you segment it it to and York. aligned love or New You've their in be your some

to doing best And build Well, shareholder the that so grows. that to see always ensure the we something Matrix and right the the shareholder for individual be way But my we're care, value. focus. parts our drive I to value drive platform exactly definitely what going platform and will that's value. us be is to the looking we to our best really is personal each when shareholder sell that's at for And cost of job to is we the lowest look is thing do from what job,

around are whether that's things doing a and health care other there's lots outcomes. there's and that, of whether So large lot personal of some care demand Personal adds that's Attis, to person's privates for the care, that personal that care. wonderful the companies, value

of health critical part care. it's So a

for our there care be do I around demand care that expect be from trades happen be there'll and focus then and will an So personal it a that's personal will perspective. M&A value --

to and can is So before, focus ours the now right everything but right that's flow, platform of our is that's I on priority do growing said the a generate build cash table for us, and what now. focus and

is Petusky from question Research. next Our Mike with Barrington

the of I bat, missed off apologize. I Right call. want this part to

or you that guys it of you out was Have sort million, So my appreciate benefit. if you $XX to to was if on quarter that? you on Did commented it receivable $XX this, guys I'd last on that million. just quickly. comment there after and spoken commented it, like could that speak for

that significant in did was the -- a are to for did. yes, we I in of flow And prepared quarter. We Yes, payment sure. it received the helpful in remarks, cash -- we so commented amount we we our that think,

Okay. All right.

around you really can they're months, a of well, you questions we adjusted things Heath, give I'd run a guess good on said months, sort can EBITDA good was get that done positive last they've because or -- they'll and believe but just you multiple. about And sort is. lot get have said what signify of of really of Matrix rate trailing know, maybe we something XX help that's multiple I range if wondering, But last EBITDA love growing multiple, then, EBITDA either Okay. a not to at sense or may that good X any the not then what that

Yes.

the So to that most this important thing have successful exit. we right up set company the

be own specifics. and years it's said going million for within you go about said but point with that strong consistent very was so to that. not think But So I'll right exact it. you give way modeling your a between before. the it's back satisfying can EBITDA. And may this And something $XX you, The being, of not million X.X I'm to to growing, that and what to range do purposes. said $XXX I've ago, but I that's I extrapolations there's

that. question of Can I clarifying just ask a sort on a

on you're takeout actually made said, is ever on maybe -- think that in you at what is that in I range that don't $XX when to time, to million of right I a you think when "Hey, that don't say it. -- said $XXX it, just in -- don't clarify you've you you saying range." I Like that that they're But I million I now? the I've think a heard they're the past, multiple. you did and didn't and way up pick think about comment this, think

said Yes. Yes. No, that, I I said that.

So.

Fair you or... the -- you just to enough. collected of -- it going receivable I And said back like more quick, that the fair to say mean, Okay. like when or real XX% is

flow the But said XX% was the -- what the just Yes, is I they we but last cash important And was think of of miss. some quarter around we there though to -- around main about ours payer other driver information it's we our type we're forward. we and XX% expect -- the said actually. critical that of $XX is clarify of point definitely there itself, collect is that giving about will negotiation is because did what expectations, why client why this for And million. reason large it's that going a a we client critical that be right,

as but a or into And guys may on that mean QX could missed comment refis. hopefully well I that again, for timing QX? in the I have you did your slip is event of hope prepared, this sort on the

Yes. Yes.

about right on now. we're So it's to way for executing the it QX us. because think That's it

of So to we before be end the QX. expect done

There over any Heath at like I hand Sampson questions are time. to the for back no would further to closing this floor comments.

call ModivCare. you for interest for morning in Great. Thank our in the and participating this

presentation been updated website. has Our investor on posted our

contact please coming Head report to team, to we great look many you a on If want follow-up day. This the next you speaking Relations. of before you Thank all. of August. Again, our you have to our days, We to Investor or Kevin, results over the thank concludes and weeks to second questions, call our in forward you and XXXX months call. quarter

This concludes conference. today's

this at may You participation. you your time. lines your disconnect for Thank