Earnings call transcript: ModivCare reports Q1 2025 loss, stock dips

ModivCare Inc. (MOTV) reported a challenging first quarter of 2025 with a net loss of $50.4 million, up from $22.3 million in the same period last year. The company’s revenue fell to $650.7 million, a 5% decrease year-over-year. Operating with a significant debt burden of $1.3 billion and quickly burning through cash according to InvestingPro analysis, these results led to a 5.19% drop in the company’s stock price during aftermarket trading, closing at $1.28.

Key Takeaways

• ModivCare’s Q1 2025 revenue declined by 5% year-over-year.
• The company reported a net loss of $50.4 million, with higher interest expenses and contract losses cited as key factors.
• Stock price fell by 5.19% in aftermarket trading following the earnings announcement.
• No formal guidance for 2025 was provided, but strategic initiatives are underway.

Company Performance

ModivCare faced a difficult start to 2025, with financial performance impacted by several factors, including increased interest expenses and contract losses in its Non-Emergency Medical Transportation (NEMT) segment. The company’s revenue of $650.7 million marked a 5% decrease from the previous year, with a concerning current ratio of 0.79 indicating potential liquidity challenges. Despite these challenges, ModivCare has been focusing on digital transformation and operational restructuring to improve efficiency and service delivery. InvestingPro analysis reveals 12 additional key factors affecting the company’s performance, available to subscribers.

Financial Highlights

• Revenue: $650.7 million, down 5% year-over-year
• Net Loss: $50.4 million, compared to $22.3 million last year
• Adjusted Net Loss: $24.5 million or -$1.71 per share
• Adjusted EBITDA: $32.6 million, flat compared to last year

Earnings vs. Forecast

ModivCare’s financial results missed analyst expectations for Q1 2025. The company had a forecasted EPS of -$0.44, but reported an adjusted EPS of -$1.71, significantly below expectations. This miss is primarily attributed to increased interest expenses and contract losses, which have weighed heavily on the company’s profitability.

Market Reaction

Following the earnings release, ModivCare’s stock price fell by 5.19% in aftermarket trading, closing at $1.28. This decline reflects investor concern over the company’s increased losses and the lack of formal guidance for the rest of 2025. The stock has fallen significantly over the past year, with a total return of -94.86%. According to InvestingPro’s Fair Value analysis, the stock appears undervalued at current levels, though significant risks remain. The stock’s movement contrasts with broader market trends, highlighting specific challenges faced by the company.

Outlook & Guidance

While ModivCare did not provide formal guidance for 2025, the company emphasized its focus on strategic initiatives aimed at improving cash flow and operational efficiency. These include digitalizing the Care Access platform, optimizing its operating model, and increasing capital efficiency. The company is also exploring strategic alternatives to enhance shareholder value.

Executive Commentary

CEO Heath Sampson highlighted the company’s commitment to improving performance and modernizing its platform. "We are executing with urgency and focus, improving our business unit performance, strengthening our balance sheet, and advancing our platform modernization," Sampson stated. He also emphasized the company’s long-term vision to become the digital infrastructure for supportive care.

Risks and Challenges

• High interest expenses, which have nearly doubled, continue to pressure profitability.
• Contract losses in the NEMT segment and declining service hours in Personal Care Services pose ongoing challenges.
• The departure of key executives, including the CFO and CIO, could impact strategic continuity.
• Market saturation and competitive pressures in the Medicaid managed care sector remain significant hurdles.

Q&A

During the earnings call, analysts raised questions about ModivCare’s cash flow challenges and the impact of its contract mix on accounts receivable. The company addressed concerns about revenue per trip and member metrics, emphasizing efforts to achieve G&A savings primarily through labor reductions.

Full transcript - ModivCare Inc (MODV) Q1 2025:

Conference Call Moderator: Good day, everyone, and welcome to Motive Care’s First Quarter twenty twenty five Financial Results Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. Please note this conference call is being recorded. Today’s speaker will be Hugh Sampson, MotiveCare’s President and Chief Executive Officer.

Before we get started, I want to remind everyone that during today’s call, management will make forward looking statements under the Private Securities Litigation Reform Act. These statements involve risks, uncertainties and other factors that could cause actual results or events to differ materially from expectations. Information regarding these factors is contained in today’s press release and in the company’s filings with the SEC. We will also discuss non GAAP financial measures to provide additional information to investors. A definition of these non financial measures and the applicable reconciliations to their most directly comparable GAAP financial measures is included in our press release and Form eight ks.

A replay of this conference call will be available approximately one hour after today’s call concludes and will be posted on our website, motivecare.com. This morning, Heath Sampson will begin with opening remarks and review our financial results and guidance. Then we’ll open the call for questions. With that, I’ll turn the call over to Heath.

Heath Sampson, President and Chief Executive Officer, MotiveCare: Good afternoon, everyone, and thank you for joining us today. We appreciate the opportunity to walk through our first quarter twenty twenty five results and provide an update on execution across our operating priorities. To create a consistent framework for reporting progress, we are aligning our updates to five enterprise objectives. One, grow and retain core customer relationships across all segments. Two, digitize and automate our Care Access platform.

Three, optimize our operating model for simplicity and scale. Four, increase capital efficiency and advance deleveraging. And five, deliver high impact client centric supportive care. These five objectives guide our decision making across segments and functions and will continue to serve as the structure for how we communicate execution and performance going forward. Now moving to our first strategic objective, to grow core customer relationships across all segments.

In Q1, we focused on strengthening customer relationships through retention, targeted renewals and new business wins across all three segments. In NEMT, we secured two new Medicaid managed care contracts, one in the Southwest and one in the Pacific Region, representing a combined annual contract value of approximately $52,000,000 with expected in year revenue contribution of around $38,000,000 We remain the platform of choice for large health plans seeking broad network access, consistent quality outcomes and actual insights to improve member satisfaction and reduce the total cost of care. Our forward looking tech enabled approach to integrating the care ecosystem, combined with our ability to help clients proactively manage evolving CMS requirements, including the complex and state specific needs of dual eligible populations ahead of the 2027 mandates continues to differentiate Motive Care in the market. We also submitted four state contract renewals totaling over $246,000,000 in annual contract value. In each case, we are the incumbent and we remain on track for the renewal and continue to be a high value quality partner in each of these states.

Our broader opportunity in 2026 pipeline exceeds $500,000,000 in potential contract value. We also experienced the loss of a regional contract totaling $15,000,000 in annual revenue, driven by a national plan’s decision to consolidate vendors. While this was a smaller relationship, it was one we believe we should have retained. Performance was strong. This reinforces the importance of our ongoing investments in commercial responsiveness and account level management discipline.

Retention remains a key performance priority. In Personal Care, we signed four strategic agreements, including two national and two regional plans. These contracts span geographies in the Northeast and Southeast and are expected to generate between 90,000 monthly service hours with contribution margins above our Medicaid average. In monitoring, we continue to grow our Medicaid footprint, adding two new markets during the quarter. In Indiana, which is about 10 of our LTSS revenue, referral volume increased by more than 45% year over year, while our newest Southeastern market delivered sequential growth.

Our innovation and development efforts are beginning to deliver results, expanding our monitoring and care management capabilities beyond traditional per solution. While we are still in early stages launching new contracts, we believe the total addressable market is substantial and we have built the infrastructure and capability needed to scale effectively. Now turning to our second strategic objective to digitize and automate our Care Access platform. We continue to advance our digital transformation strategy in Q1 with a focus on improving operation scalability, reducing unit cost and preparing each segment for future growth. In NEMT, our self-service call to trip ratio reached 36.1%, up from 35% in Q4 and 31% a year ago.

This growth in digital reservation was supported by ongoing API integration and channel enhancements. Automated intake and trip adjudication contributed to 1.2% year over year reduction in unit costs with purchased services per trip decreasing to $40.69 Digital trip volume exceeded 1,000,000 transactions in the quarter. Complaints, a key performance metric in the complex NEMT environment, declined 31.2% year over year and on time performance rose to 95.2% and missed trips decreased by 20% quarter over quarter, reflecting meaningful improvements driven by automation and enhanced service coordination. We also expanded the use of our intelligent virtual agent for outbound call handling and deployed AI powered tools for QA automation. These tools are improving writing accuracy, speeding up feedback loops and creating more consistent oversight across contact center operations.

As part of monetization in the NEMT segment, we’re in the process of restructuring the organization and are building out a more tech first model by adding talent in data, AI and agile operations. While we continue to operate with over 2,000 contact center agents and 800 transportation support roles, the infrastructure now in place positions us to accelerate automation, reduce fixed labor intensity and streamline repetitive tasks going forward. In personal care, we expanded deployment of digital tools included for shift scheduling, caregiver engagement and e learning, which achieved a seventy two percent completion rate among newly onboarded caregivers. These are industry leading tools which enable recruiting and retaining caregivers, while also strengthening compliance in revenue cycle management and supporting robust fraud, waste and abuse controls. In monitoring, we completed phase one of our cloud based continuity platform and launched new revenue cycle management automation.

Together, these initiatives reflect the foundation of our platform modernization strategy. They are enabling faster execution, reduced manual workload and supporting more scalable and compliant service delivery in both current operation and future business models. Now for our third strategic objective, to optimize our operating model for simplicity and scale. We advanced our structural realignment work by streamlining operations, consolidating leadership structures and reducing fixed overhead across the business. In April, we launched a company wide G and A reduction initiative targeting approximately $25,000,000 in annualized savings, with additional opportunities identified as part of the ongoing plan.

Combined with the optimization actions implemented in late twenty twenty four and early twenty twenty five, the savings were driven by workforce efficiencies, vendor consolidation and realization of plan reductions. As part of our ongoing organizational alignment and future strategic plans, Bob Gutierrez, CFO and Jessica Kral, CIO will be departing the company after advancing their respective functions in the company over the last few years. These transitions are deliberate and aligned with both our near term priorities and the long term direction of the business. We have a strong experienced finance team with deep public company healthcare and audit experience, backed by leaders focused on execution and results. On the technology side, we’re advancing the next phase of our platform with a capable team leading our shift toward automation, AI and digital scalability.

In NEMT, we completed a full operating restructure, integrating trip operations, pricing, client services and transportation network management under unified regional leadership. This model enhances decision speed and financial accountability in the field, while enabling a modern, connected and hyper local healthcare ecosystem. In personal care monitoring, we streamline operation to reduce costs and improve execution. In PCS, a shift to a hub and spoke model drove $1,000,000 in year over year G and A reduction, supported by standardized dashboards, tracking caregiver onboarding and branch efficiency. Across all three segments, these operating model changes are designed to simplify execution, reduce structural cost and support strategic flexibility.

Now turning to our fourth strategic objective to increase capital efficiency and advance deleveraging. In Q1, following the successful capital raise in January, we remained focused on improving cash flow, reducing capital intensity and future deleveraging. In NEMT, we transitioned several large customers to faster settling fee for service like models. These agreements retain performance and cost based payments while limiting exposure from utilization or member mix volatility. As a result, collection predictability will improve and several contracts now settle within ninety days or less compared to prior cycles of six to eighteen months.

We have demonstrated improved alignment with our payer partners and a more proactive revenue cycle management. As a result, in April, we collected a large NCO contract receivable from 2024 of approximately $30,000,000 a month earlier than we expected. To reinforce capital discipline and governance, we recently completed the final step of our Board recomposition. In April, we also established a strategic alternatives committee of the Board. This committee is now overseeing the ongoing portfolio and capital review process, including potential divestitures in close coordination with management, the Board as a whole and external advisors.

Now turning to our fifth strategic objective, to deliver high impact client centric supportive care. Our long term vision is to become the digital infrastructure for supportive care for each segment standalone or together. The operational infrastructure connecting payers, providers, caregivers and members. This allows Motive Care to unify fragmented benefits and deliver a coordinated member experience across in home, virtual and community based services. This approach positions us to meet the healthcare system where it is going into the home, more preventative, digitally enabled and increasingly centered around the number, improving satisfaction and lowering the cost of care.

It also differentiates us in a fragmented market, not just through our service breadth, but through our ability to coordinate care efficiently at scale. Now turning to our consolidated first quarter financial results. Revenue for the quarter was $650,700,000 down 5% year over year and 2% sequentially. The decline was driven primarily by known NEMT contract attrition, lower build hours in PCS and membership churn in monitoring. These impacts were expected and reflect prior year customer transitions and market dynamics that are now largely behind us.

Net loss for the quarter was $50,400,000 up from $22,300,000 a year ago. The increase was primarily due to higher interest expense, which rose to $38,800,000 nearly double the prior year as a result of higher borrowing costs on the fully drawn revolver. Adjusted net loss was $24,500,000 or negative $1.71 per share, which reflects the exclusion of restructuring related costs and amortization of intangibles. Adjusted EBITDA came in at $32,600,000 essentially flat year over year, but down sequentially, again in line with expectations. Key drivers of the sequential decline included an $8,000,000 impact from net NEMT contract development, reflecting the balance of new wins, losses and repricing a $7,000,000 impact from lower EBITDA in PCS and Monitoring.

These impacts were partially offset by improved pricing, favorable utilization mix in AMT and lower service expense and G and A. In NEMT, revenue of $449,000,000 representing 69 of total revenue declined 6% year over year due to previously disclosed contract losses. Average monthly members declined 19% year over year and 20% sequentially. Also utilization from the normalization of healthcare increased to 12%. We’ve either repriced or in the process of repricing our full risk contracts, primarily with state clients to better align with current utilization levels.

These pricing resets are designed to stabilize margin and reduce working capital volatility. To that end, we are also redesigning contract terms to accelerate settlement and improve cash conversion. These efforts are already underway with the goal of achieving more stable cash flow dynamics by 2026. Revenue per member per month rose 16% year over year to 6.3513% sequentially, a result of stronger acuity mix and pricing updates. Adjusted EBITDA for mobility was 27,800,000 with a 6.2% margin, up 50 basis points year over year and 60 points sequentially, driven by pricing discipline, mode optimization and cost structure improvements.

PCS contributed $181,800,000 in revenue or 28% of total revenue. Revenue per hour rose 1.1%, while service hours declined 2.1% due to expected seasonality and localized labor shortages. Adjusted EBITDA was $12,200,000 up 9% year over year, driven by structural cost savings and temporary delay in wage rate changes. Margins will normalize in Q2 as these wage adjustments phase in. Monitoring contributed $18,100,000 in revenue representing just 3% of total revenue, but 16% of total adjusted EBITDA.

Adjusted EBITDA was $5,200,000 for a 29% segment margin. While revenue was impacted by the planned exit of a Medicare Advantage customer in certain PERS markets, Medicaid LTSS referrals grew, including a 45% year over year increase in Indiana and additional programs launched in new states. We are now operating under three active condition based monitoring contracts and continue to progress towards full divestiture readiness, including legal, HR and operational separation and advisory engagement. Turning to the balance sheet. Net contracts receivable rose $109,000,000 up from $95,000,000 in Q4 due to expected billing timing.

However, we are already seeing improvement. In April, we collected $30,000,000 in receivables, approximately two months ahead of contract terms, reflecting improved payer alignment and proactive revenue cycle management. We ended the quarter with $116,000,000 in cash and a fully drawn revolver of $269,000,000 Free cash flow was negative at $86,200,000 largely due to working capital build from timing of accounts payable, contract transitions and higher interest expense tied to our capital structure. We are continuing to take disciplined action to manage costs, drive execution and position the business for long term performance. Our strategic priorities remain unchanged: grow and retain core customer relationships digitize and automate our Care Access platform, optimize our operating model for simplicity and scale, increase capital efficiency and advanced deleveraging, and lastly, deliver a high impact client centric supportive care model.

These objectives guide our operational decisions, investment focus and how we evaluate long term portfolio strategy. As shared previously, we are not issuing formal guidance in 2025. Instead, we are focused on executing against measurable initiatives and communicating progress through clear objective KPIs and milestones. That said, we are executing with urgency and focus, improving our business unit performance, strengthening our balance sheet and advancing our platform modernization. Our progress is a direct result of the work of our team.

From caregivers and drivers to call center agents, engineers and operators, Their execution and commitment are enabling us to deliver essential care and build a stronger, more connected mode of care. We look forward to continuing this momentum and updating you on our progress in Q2. Operator, we’re now ready to take your questions.

Conference Call Moderator: Thank you. We’ll now be conducting a question and answer session. You. Our first question is from Pito Chickering with Deutsche Bank.

Pito Chickering, Analyst, Deutsche Bank: Hey, good afternoon guys. I guess, we’ll start off just on cash flow from ops. Working capital was obviously a pretty big use of cash this quarter. Cash flow burn of $82,000,000 Can you just walk us through how we should be thinking about cash flow generation throughout the rest of the year? You talked about the $30,000,000 collection you guys got.

But just how we should be modeling cash flow generation for the year?

Mike Petusky, Analyst, Barrington Research: And then looks like there’s

Pito Chickering, Analyst, Deutsche Bank: a $2,000,000 settlement the quarter. Just want see if that’s a charge against ARs or something else?

Heath Sampson, President and Chief Executive Officer, MotiveCare: Yes. Hey, thanks, Pito. I’ll start with the $2,000,000 The $2,000,000 was a settlement for a legacy case in the personal care business, that we cleared up. And then cash, yes, you’re on it, right? For us, it’s pretty simple.

Our EBITDA is driving our cash. And then you can see and a good way to kind of walk through this is on Page eight of the deck. This will help us walk through the other items and how we look forward. And you’re seeing now that based on the wins that we had in the mobility side, had $52,000,000 The legacy losses that we have, those have been flushed through. So this continued growth within the business as well as your utilization for us going up and because of our contract mix, that’s a favorable benefit to us.

So growth in revenue and contracts will add to that EBITDA, so the business development growth. And then our cost savings, you see them here, see the cost savings that we had from prior year rolling forward. You’re seeing the automation cost savings and then we also talked about continued G and A, that $25,000,000 that we cut. So those will also flow through. And then the changes in PCS that are kind of coming from COVID related payments and monitoring, you should expect those to contribute as well.

So all the drivers that are controllable are moving in the right direction for us. So then the last component, that is controllable is around working capital. And this is one item that we know we’ve been talking about for a while, right? But now, especially coming out of last year and also because of the great work that our teams are doing around restructuring these contracts, we’re becoming much more predictable. And you’ll see that working capital need continue to come down each quarter.

And as we exit into 2026, we should have the majority of our contracts onto the right structure so that long working capital need will go away. In addition to that and you did see AR rise this year, this quarter, But as we said on the call, we are moving contracts and again we expect that to continue. So that AR will come down. So working capital benefit coupled with the AR will have a I feel really good of our ability to generate cash off of that. And then of course, have the taxes and the add backs and the add backs reps have come down, it’s mainly going to be kind of restructuring and fees.

So long story short, the benefits that we’re driving and making decisions around cost out, both in G and A and automation, coupled with the working capital changes, we expect meaningful improvement on cash flow generation as we exit the year.

Pito Chickering, Analyst, Deutsche Bank: Okay. So one more follow-up on that one. I mean, with overall revenue down sort of 4.9% year over year and EMT is down 6.3% year over year, I guess, why do contract receivables and long term contracts receivables increased by $17,000,000 I guess I’m trying to figure out how revenue is down, how the AR is up there?

Heath Sampson, President and Chief Executive Officer, MotiveCare: Yes, that revenue that went down were for those primarily those two contracts, the MA contract and then that Florida contract that rolled off in January. So that’s the main driver that we knew about end of last year for that. And we’ve been increasing since then and expect them to roll on. And the AR is completely to do with our contracts that are on shared risk. And those contracts have remained and until we’ve switched them over, which we’ve started to now, they just grew in accordance with the way the contracts are structured.

So it’s a disconnect mainly because of the contract mix and the shared risk contracts not being converted until this quarter and going into next year, which is why AR went up in those items, in those areas.

Pito Chickering, Analyst, Deutsche Bank: Great. And then one sort of, I guess, in the fundamental one looking at, like any MT obviously your total trips are down due to contract losses, your revenue per member month is up 13% and your revenue per trip is up 2.4%. Is this just a mix issue that those contracts are lost just to be shifted around the mix there or is there something else that’s happening there? And as you model this thing out for the rest of the year, is this the right revenue per member and revenue per trip that we should be thinking about for 2025?

Mike Petusky, Analyst, Barrington Research: And then also the

Pito Chickering, Analyst, Deutsche Bank: contract that you lost that you were the incumbent, I guess any sort of color on sort of why you guys lost that? Thank you so much.

Heath Sampson, President and Chief Executive Officer, MotiveCare: Yes. So the revenue per trip items, you’re right, it is a mix change. That’s the main driver of that for Q1. For us, especially coming out of COVID and as we’ve been repricing these to be in line with the win win structures that we have with our clients, I expect our revenue mix to stay the same and therefore those per trip metrics to be kind of normal throughout the rest of this year. We will be having, as we said, adding new business, and the mix may change a little bit, but those would be for the benefit.

And then on the contract that we lost, again, really we want to be transparent around our competitive advantages that we’re seeing in transportation. But we also want to be transparent around if something happened and we lost this one pair that consolidated with another competitor. For us, we want to be transparent around that. But that’s not representative. We have 40 other contracts on our MCO side that we feel that we’re in the process of renewing it and extending additional pipeline and as we said additional closures in Q1 and I expect that to happen.

But at the same time we did. So relative to the win, definitely smaller, but at the same time it’s important for us to ensure that our continued progress around our account management and client management continues to improve, so I expect it will.

Pito Chickering, Analyst, Deutsche Bank: Great. Thanks so much.

Heath Sampson, President and Chief Executive Officer, MotiveCare: Thanks, Pito.

Conference Call Moderator: Thank you. Our next question is from Mike Petusky with Barrington Research.

Heath Sampson, President and Chief Executive Officer, MotiveCare: Yes. Hey,

Mike Petusky, Analyst, Barrington Research: Hi, Mike. I’m going to try to drill down a little bit on that cash flow question. I’m just going to ask it real plainly. I think you guys have sort of big debt payments in I think Q2 and Q4, is that right?

Heath Sampson, President and Chief Executive Officer, MotiveCare: Interest payments? Yes, that’s correct. Q2, Q4. Okay.

Mike Petusky, Analyst, Barrington Research: Is there I’m assuming that you can’t generate positive cash flow from ops in those cores. I’m wondering, A, is that true? And B, if that is true, is there a positive cash flow possibility in Q3? Thanks.

Heath Sampson, President and Chief Executive Officer, MotiveCare: Yes. The right way to look at because of the lumpiness in the debt payments, yes, we manage in cash by a monthly, weekly basis, and also quarterly. But the right way to think about it is annually because of those lumpiness. And you saw the cash that we have on the balance sheet coupled with what I talked about before around the contract changes and what that’s going to do to our working capital and the collection of that AR, we feel really good in the cash flow generation for where we are and our balance sheet and everything that we’re doing right now to ensure that, we have the right level of cash to ensure that we operate, as we move through the months and the quarters.

Mike Petusky, Analyst, Barrington Research: Right. But Heath, I’m going try to pin you down one more time. Is there a positive cash flow quarter in this year?

Heath Sampson, President and Chief Executive Officer, MotiveCare: Yes. So you’re right on the negative cash flows because of the large debt payments in Q2 and Q4. We won’t give you the exact forecast in the other quarters. But with what we have done in January, what we’ve continued to do, what we are expected to do around cost out and automation, we’re operating as we should and I feel good about our current position.

Mike Petusky, Analyst, Barrington Research: Okay. Can we talk a little bit about the strategic alternatives, I guess, initiative? And just obviously, there’s some it feels like there’s some urgency in this situation. And I’m just curious, I mean, do you see something coming out of that initiative in the current year?

Heath Sampson, President and Chief Executive Officer, MotiveCare: Yes. So, we feel really good about our businesses, what we’ve done and at the same time delevering is a top priority for us. That’s critical to our stakeholders. So, that’s why we are doing it. That’s why we look forward to updating you as we move through.

So the urgency is the right level of balance to ensure that we’re doing the right thing for all stakeholders. So we will sell when it is the right time to sell. That’s the best thing for again all stakeholders. So there’s the right level of patience and urgency to ensure that we get the right value at the right time. So I’m comfortable with the business we’re in and the great work that each of those businesses are doing is going to ensure that we get the right value.

Mike Petusky, Analyst, Barrington Research: Last one and I’ll jump off. But in terms of the if you mentioned specifics on the G and A savings where those are coming from, missed it. Can you can you lay out more specifics around where the 25,000,000

Heath Sampson, President and Chief Executive Officer, MotiveCare: Yes. So it’s across the board, but it’s primarily within the corporate and shared service areas. As we continue to get more efficient in our operations that are customer facing and drive value for the customer facing and improve because of what we’ve done during the transformation, because of the automation. We’re able to ensure that we the back office or the extra people that were necessary to compensate for some of the stuff. We don’t need that anymore, because of our efficiencies, our focus and simplicity.

But it’s primarily in the shared service and corporate side that those dollars came up.

Mike Petusky, Analyst, Barrington Research: And primarily labor?

Heath Sampson, President and Chief Executive Officer, MotiveCare: Yes. So primarily labor, there are vendor statements, but we got those earlier, but that 25,000,000 that I said is majority of that is labor. Okay.

Mike Petusky, Analyst, Barrington Research: All right. Very good. Thank you.

Heath Sampson, President and Chief Executive Officer, MotiveCare: Great. Thanks Mike.

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

Heath Sampson, President and Chief Executive Officer, MotiveCare: Well, thanks everybody. I appreciate you joining the call this afternoon. I’m really proud of what the team has done, and really proud about us weathering the storm coming out of last year. It was an unprecedented time, a lot of that behind us. And as you can see in Q1, the execution and the progress we made and I really look forward to updating you in Q2 on that continued progress.

So thanks again for joining and look forward to talking to you in a few months. Take care.

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