ModivCare Inc. reported its financial results for the third quarter and nine months ended September 30, 2024, highlighting a mixed performance amid ongoing challenges in the healthcare sector. The company generated service revenue of $702.0 million for Q3 2024, a 2.2% increase from $686.9 million in Q3 2023. For the nine months, service revenue totaled $2.08 billion, up 1.8% from $2.05 billion in the same period last year. The growth was primarily driven by increases in the Non-Emergency Medical Transportation (NEMT) and Personal Care Services (PCS) segments, which saw revenue rises of $6.3 million and $8.5 million, respectively.
Despite the revenue growth, ModivCare faced rising operational costs, leading to total operating expenses of $696.8 million in Q3 2024, compared to $675.4 million in Q3 2023. This resulted in a decline in operating income to $5.3 million from $12.0 million year-over-year. The net loss for Q3 2024 was $(26.6) million, significantly higher than the $(4.3) million loss reported in Q3 2023. For the nine-month period, the net loss improved to $(177.8) million from $(199.2) million in the prior year.
The company’s accumulated deficit increased to $(202.2) million as of September 30, 2024, compared to $(24.4) million at the end of 2023. Total stockholders’ equity turned negative, standing at $(17.0) million, down from $156.2 million at the end of 2023. Cash and cash equivalents rose to $48.3 million from $2.2 million at year-end 2023, reflecting improved liquidity management.
ModivCare's financial position was impacted by extended collection periods for receivables, particularly in Medicare and Medicaid arrangements, raising concerns about its ability to meet obligations within the next year. The company amended its Credit Agreement to increase the maximum permitted Total Net Leverage Ratio from 5.25:1.00 to 6.50:1.00 for Q3 2024, ensuring compliance with financial covenants.
Strategically, ModivCare recorded a goodwill impairment charge of $105.3 million in Q2 2024, down from $183.1 million in Q2 2023, indicating a focus on improving asset valuations. The company is also exploring long-term relief amendments with its bank group to enhance liquidity and compliance with financial covenants.
Overall, while ModivCare experienced revenue growth, it continues to navigate significant operational challenges and financial uncertainties, particularly related to cash flow and compliance with debt covenants.
About ModivCare Inc
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