Regardless of change in management, Modivcare is accelerating as a home-focused large

Two days after Modivcare (Nasdaq: MODV) announced that it was replacing its former CEO Dan Greenleaf, interim CEO L. Heath Sampson painted a rosy picture of the company’s future.

While at the helm of the company, Greenleaf helped the company complete several massive deals, including acquiring personal care providers Simplura Health Group and CareFinders — for $575 million and $340 million, respectively — and the businesses for the Remote Patient Monitoring (RPM). VRI and Guardian Medical Monitoring, also at great prices.

“Dan Greenleaf is no longer CEO or a member of the board of directors of Modivcare,” L. Health Sampson said Thursday when announcing Modivcare’s second-quarter results. “Our board has appointed me interim CEO. I appreciate the opportunity the board has offered me and I look forward to serving and leading our team.”

Unfortunately, the company is moving in a new direction, but appears to be following the same path it embarked on under Greenleaf’s oversight.

“Those acquisitions over the last several years have really allowed us to now have a unique set of assets that allow us to truly be the only supportive care company that has these things,” Sampson said. “So the strategy is consistent with what it was in the past. … Now it’s all about execution. How do we bring these assets together?”

Denver-based Modivcare is a provider of personal care, non-emergency medical transportation, and meal delivery services. In total, its 20,000 employees provide supportive care services to approximately 34 million people.

In the last two years, the internal personnel capacities have grown significantly due to the acquisitions. This segment is also expected to be a growth driver going forward.

“As we transform our business, we anticipate that much of our growth opportunity will come from moving care into the home,” Sampson said. “Our home division is growing organically through new customer growth, accelerated caregiver recruitment initiatives in existing markets, de novo openings and increasing scale and density.”

Modivcare revenue was $628 million in the second quarter, up more than 32% year over year compared to $474 last year. By segment, NEMT revenue increased 23% to $448.7 million; Personal Care grew over 48% to $162.7 million; and remote patient monitoring brought in $16.7 million.

Medicare Advantage (MA) has also been part of the company’s rapid growth historically, another trend Modivcare executives anticipate. At the same time, Medicaid has been the top payer for its personal care segment, an area where Sampson believes there’s still a lot more demand to meet.

“MA for is an important focus and has been a big part of our growth – mainly on the transport side,” he said. “We expect this growth to continue across all of our businesses. The personal care side was primarily the Medicaid side, and there’s still a lot of growth to come [available] there because we cannot even meet the demand there.”

Quarterly results were good enough for the company to raise its guidance for future financials.

Despite the leadership reshuffle, analysts are also encouraged by Modivcare’s way forward.

“The second quarter results underscore the company’s strong fundamental prospects,” Stephens analyst Scott Fidel wrote in a note provided to Home Health Care News. “Underlying strength was demonstrated across all three business segments, with revenue and EBITDA exceeding our model in each segment. All three segments also reported double-digit Adjusted EBITDA margins for the quarter. … We see strong prospects for Modivcare.”

The conference call generally lacked details on the leadership change, which — at least from the perspective of an outsider — was sudden.

However, Sampson did mention that the company may expand its leadership team in the future.

“In the home business, we have great talent there,” Sampson said. “But we know we also need some additional leadership talent to ensure we continue to grow.”

The board is currently searching for its next CEO. For now, it looks like Sampson – who has been with the company for a year and a half – could have a shot at the permanent title.

“When these changes happen, people are involved and there are a lot of emotions,” he said. “But here really are all professionals. And edit these professionals individually [these things] and are now focused on what they can do to help the business continue to grow.”

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