Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries CareMax Reports Second Quarter 2023 Results By: CareMax, Inc. via Business Wire August 09, 2023 at 06:55 AM EDT Second Quarter Medicare Advantage Membership of 102,500, up 177% year-over-year Second Quarter Total Revenue of $224.4 million, up 30% year-over-year Raising Full Year 2023 Revenue Guidance; Reaffirming Full Year 2023 Adjusted EBITDA Guidance CareMax, Inc. (NASDAQ: CMAX; CMAXW) (“CareMax” or the “Company”), a leading technology-enabled value-based care delivery system, today announced financial results for the second quarter ended June 30, 2023. “We continued to deliver on our growth strategy, ending the quarter with 102,500 Medicare Advantage members, up 177% year-over-year, and have confidence in achieving both our near and long-term membership targets that we announced at our investor day in March. Our second quarter performance was strong, excluding the impact of an unfavorable $7 million prior year development related to a Medicaid contract from 2022. Looking ahead, we are encouraged by the underlying performance of our business in the first half of the year and are raising our full year 2023 revenue guidance while reaffirming our adjusted EBITDA guidance range,” said Carlos de Solo, Chief Executive Officer. Mr. de Solo continues, “At CareMax, our mission is to provide better care to seniors across the country. We believe our fully-integrated care model, powered by our proprietary built technology platform and highly scalable operating model, positions us well to achieve the long term goals we announced in March. We are excited for the next few years as we expect to continue to accelerate our growth and expand access to high-quality care for seniors nationwide.” Second Quarter 2023 Results Total membership of 272,500, up 210% year-over-year. Medicare Advantage Membership of 102,500, up 177% year-over-year. Total revenue was $224.4 million, up 30% year-over-year. Net loss was $32.4 million, compared to net loss of $9.4 million for the second quarter of 2022. Adjusted EBITDA was $7.0 million, compared to $7.2 million for the second quarter of 2022.1 Platform Contribution was $28.6 million, compared to $21.6 million for the second quarter of 2022.1 Medical Expense Ratio was 84.6%, compared to 73.6% for the second quarter of 2022. De novo pre-opening costs and post-opening losses for the second quarter of 2023 were $5.8 million.2 Financial Outlook for Full Year 2023 CareMax is raising the following full year 2023 financial guidance: Total revenue of $750 to $800 million, up 19% to 27% year-over-year, from prior guidance of $700 million to $750 million. CareMax is reaffirming the following full year 2023 financial guidance: Year-end Medicare Advantage membership of 110,000 to 120,000, up 18% to 28% year-over-year. Adjusted EBITDA of $25 million to $35 million, up 31% to 83% year-over-year, compared to $19.1 million for the year-ended December 31, 2022.1 De novo pre-opening costs and post-opening losses are anticipated to be approximately $25 million in 2023. 1 Adjusted EBITDA and Platform Contribution are non-GAAP financial metrics. A reconciliation of non-GAAP metrics to the most directly comparable GAAP financial measures is included in the appendix to this earnings release. Beginning with the three months ended June 30, 2023, the Company has updated its calculation of Adjusted EBITDA on a retrospective basis to no longer add back certain compensation costs for stay-on bonuses and duplicative salaries previously included within the Business Combination integration costs adjustment. Adjusted EBITDA as previously reported for the second quarter of 2022 included an addback of $0.7 million for stay-on bonuses and duplicative salaries. Adjusted EBITDA as previously reported for the year ended December 31, 2022 included an addback of $2.9 million for stay-on bonuses and duplicative salaries. 2 De novo pre-opening costs represent (1) incremental payroll costs from employees specifically associated with the operational, contractual, physical, or regulatory infrastructure for de novo centers, prior to their opening; (2) legal costs directly associated with the de novo centers, incurred prior to their opening, which includes services such as execution of leases, health plan contracts and other agreements; (3) other expenses related to diligence, design, permitting, and other “soft costs” at new sites; and (4) rent and facility expenses prior to center opening. De novo post-opening losses include center-level operating losses recognized at a de novo center until the center breaks even, up to 18 months after opening, which consist of revenue, external provider costs and cost of care allocated for the de novo center. Conference Call Details Management will host a conference call at 8:30 am ET today to discuss the results. The conference call can be accessed by dialing (888) 330-2508 for U.S. participants, or (240) 789-2735 for international participants, and referencing conference ID 7874605. A live audio webcast as well as related presentation materials will also be available on the “Events & Presentations” section of CareMax’s investor relations website at ir.caremax.com. Following the live call, a replay will be available on the Company's website. About CareMax Founded in 2011, CareMax is a value-based care delivery system that utilizes a proprietary technology-enabled platform and multi-specialty, whole person health model to deliver comprehensive, preventative and coordinated care for its members. With over 200,000 Medicare Value-Based Care Members across 10 states, and fully integrated, Five-Star Quality rated health and wellness centers, CareMax is redefining healthcare across the country by reducing costs, improving overall outcomes and promoting health equity for seniors. Learn more at www.caremax.com. Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements include statements regarding our future growth, strategy and financial performance. Words such as "anticipate," "believe," "budget," "contemplate," "continue," "could," "envision," "estimate," "expect," "guidance," "indicate," "intend," "may," "might," "plan," "possibly," "potential," "predict," "probably," "pro forma," "project," "seek," "should," "target," or "will," or the negative or other variations thereof, and similar words or phrases or comparable terminology, are intended to identify forward-looking statements. These forward-looking statements reflect the Company’s expectations, plans or forecasts of future events and views as of the date of this press release. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important risks and uncertainties that could cause the Company's actual results and financial condition to differ materially from those indicated in forward-looking statements include, among others, the Company’s ability to integrate acquired businesses, including the ability to implement business plans, forecasts, and other expectations after the completion of the Steward transaction; the failure to realize anticipated benefits of the Steward transaction or to realize estimated pro forma results and underlying assumptions; the impact of COVID-19 or any variant thereof or any other pandemic or epidemic on the Company's business and results of operation; the Company’s ability to attract new patients; the availability of sites for de novo centers and the costs of opening such de novo centers; changes in market or industry conditions, regulatory environment, competitive conditions, and receptivity to the Company's services; the Company's ability to continue its growth, including in new markets; changes in laws and regulations applicable to the Company's business, in particular with respect to Medicare Advantage and Medicaid; the Company's ability to maintain its relationships with health plans and other key payers; any delay, modification or cancellation of government contracts; the Company's future capital requirements and sources and uses of cash, including funds to satisfy its liquidity needs and the Company’s ability to comply with the covenants under the agreements governing its indebtedness; the Company’s ability to address the material weakness in its internal control over financial reporting; the Company's ability to recruit and retain qualified team members and independent physicians; risks related to future acquisitions; the Company’s ability to develop and maintain proper and effective internal control over financial reporting and the impact of any prior period developments. For a detailed discussion of the risk factors that could affect the Company's actual results, please refer to the risk factors identified in the Company's reports filed with the SEC. All information provided in this press release is as of the date hereof, and the Company undertakes no duty to update or revise this information unless required by law, and forward-looking statements should not be relied upon as representing the Company’s assessments as of any date subsequent to the date of this press release. Use of Non-GAAP Financial Information Certain financial information and data contained in this press release is unaudited and does not conform to Regulation S-X. Accordingly, such information and data may not be included in, may be adjusted in, or may be presented differently in, any periodic filing, information or proxy statement, or prospectus or registration statement to be filed by the Company with the SEC. Some of the financial information and data contained in this press release, such as Adjusted EBITDA and Platform Contribution and margin thereof have not been prepared in accordance with United States generally accepted accounting principles (“GAAP”). These non-GAAP measures of financial results are not GAAP measures of our financial results or liquidity and should not be considered as an alternative to net income (loss) as a measure of financial results, cash flows from operating activities as a measure of liquidity, or any other performance measure derived in accordance with GAAP. The Company believes these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and results of operations. The Company’s management uses these non-GAAP measures for trend analyses and for budgeting and planning purposes. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating projected operating results and trends in and in comparing the Company’s financial measures with other similar companies, many of which present similar non-GAAP financial measures to investors. Management does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. For this reason, these non-GAAP measures may not be comparable to other companies’ similarly labeled non-GAAP financial measures. In order to compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results. A reconciliation for Adjusted EBITDA and Platform Contribution to the most directly comparable GAAP financial measures is included below. A reconciliation of projected 2023 Adjusted EBITDA to the most directly comparable GAAP financial measure is not included in this press release because, without unreasonable efforts, the Company is unable to predict with reasonable certainty the amount or timing of non-GAAP adjustments that are used to calculate this. In addition, the Company believes such a reconciliation would imply a degree of precision and certainty that could be confusing to investors. The variability of the specified items may have a significant and unpredictable impact on the Company’s future GAAP results. Use of Pro Forma Financial Information and Pro Forma Non-GAAP Financial Information Certain of the information presented in the Non-GAAP Financial Summary and in the reconciliations to non-GAAP financial measures includes pro forma information derived from the unaudited pro forma statements of operations which are provided for informational purposes only and are not necessarily indicative of the operating results or financial position that would have occurred if the acquisitions of IMC and Care Holdings had occurred in the stated historical periods, nor are they indicative of the future results or financial position of the combined company. The unaudited pro forma statements of operations do not give effect to the potential impact of any anticipated synergies, operating efficiencies or cost savings that may result from the acquisitions of IMC and Care Holdings, any integration costs or tax deductibility of transaction costs. Additionally, Adjusted EBITDA presented on a pro forma basis gives effect to the acquisitions of IMC and Care Holdings as if they had occurred in historical periods. Such non-GAAP financial measures do not necessarily reflect what the Company’s Adjusted EBITDA would have been had the acquisitions occurred on the dates indicated. CAREMAX, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) (Unaudited) June 30, 2023 December 31, 2022 ASSETS Current Assets Cash and cash equivalents $ 54,605 $ 41,626 Accounts receivable, net 159,812 151,036 Risk settlement assets 717 707 Other current assets 3,516 3,968 Total Current Assets 218,650 197,336 Property and equipment, net 24,628 21,006 Operating lease right-of-use assets 131,207 108,937 Goodwill, net 602,643 700,643 Intangible assets, net 112,537 123,585 Deferred debt issuance costs 1,052 1,685 Other assets 60,249 17,550 Total Assets $ 1,150,965 $ 1,170,743 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable $ 8,677 $ 7,687 Accrued expenses 12,634 16,854 Risk settlement liabilities 15,656 14,171 Related party liabilities 13,410 1,777 Related party debt, net 32,997 30,277 Current portion of third-party debt, net 276 253 Current portion of operating lease liabilities 7,116 5,512 Other current liabilities 7,303 790 Total Current Liabilities 98,069 77,322 Derivative warrant liabilities 2,434 3,974 Long-term debt, net 298,481 230,725 Long-term operating lease liabilities 116,187 96,539 Contingent earnout liability - 134,561 Other liabilities 11,297 8,075 Total Liabilities 526,469 551,196 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Preferred stock (1,000,000 shares authorized; one share issued and outstanding as of June 30, 2023 and December 31, 2022) - - Class A common stock ($0.0001 par value; 250,000,000 shares authorized; 112,072,237 and 111,332,584 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively) 11 11 Additional paid-in-capital 776,533 657,126 Accumulated deficit (152,048 ) (37,590 ) Total Stockholders' Equity 624,496 619,547 Total Liabilities and Stockholders' Equity $ 1,150,965 $ 1,170,743 CAREMAX, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share data) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Revenue Medicare risk-based revenue $ 155,486 $ 143,664 $ 277,079 $ 251,410 Medicaid risk-based revenue 30,054 19,896 55,680 40,062 Government value-based care revenue 22,206 - 32,216 - Other revenue 16,694 8,719 32,449 17,727 Total revenue 224,440 172,279 397,424 309,199 Operating expenses External provider costs 156,995 120,348 267,668 213,204 Cost of care 40,192 30,364 78,819 57,712 Sales and marketing 3,327 2,299 7,092 5,600 Corporate, general and administrative 20,795 18,063 44,739 37,041 Depreciation and amortization 6,828 4,903 13,404 9,965 Goodwill impairment - - 98,000 - Acquisition related costs 54 2,789 74 3,055 Total operating expenses 228,191 178,767 509,797 326,577 Operating loss (3,750 ) (6,488 ) (112,373 ) (17,378 ) Nonoperating income (expense) Interest expense (13,197 ) (3,896 ) (23,908 ) (5,624 ) Change in fair value of derivative warrant liabilities 434 7,391 1,540 3,855 Gain (loss) on remeasurement of contingent earnout liabilities (16,220 ) - 19,916 - Loss on extinguishment of debt, net - (6,172 ) - (6,172 ) Other income (expense), net 534 (45 ) 721 (507 ) (28,449 ) (2,722 ) (1,730 ) (8,448 ) Loss before income tax (32,199 ) (9,210 ) (114,103 ) (25,826 ) Income tax expense (177 ) (171 ) (355 ) (351 ) Net loss $ (32,376 ) $ (9,381 ) $ (114,458 ) $ (26,178 ) Weighted-average basic shares outstanding 111,671,302 87,422,917 111,511,214 87,395,596 Weighted-average diluted shares outstanding 111,671,302 87,422,917 111,511,214 87,395,596 Net loss per share Basic $ (0.29 ) $ (0.11 ) $ (1.03 ) $ (0.30 ) Diluted $ (0.29 ) $ (0.11 ) $ (1.03 ) $ (0.30 ) CAREMAX, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited) Six Months Ended June 30, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (114,458 ) $ (26,178 ) Adjustments to reconcile net loss to cash and cash equivalents Depreciation and amortization expense 13,404 9,965 Amortization of debt issuance costs and discounts 4,086 753 Stock-based compensation expense 4,762 3,875 Income tax provision 355 351 Change in fair value of derivative warrant liabilities (1,540 ) (3,855 ) Loss (gain) on remeasurement of contingent earnout liabilities (19,916 ) - Loss (gain) on extinguishment of debt - 6,172 Payment-in-kind interest expense 5,500 1,078 Provision for credit losses 57 - Goodwill impairment 98,000 - Amortization of right-of-use assets 5,842 - Other non-cash, net 1,213 60 Changes in operating assets and liabilities: Accounts receivable (1,255 ) (29,976 ) Other current assets 452 (504 ) Risk settlement assets and liabilities 1,968 19 Other assets (41,807 ) (105 ) Operating lease liabilities (4,959 ) - Accounts payable (128 ) 5,273 Accrued expenses (4,219 ) 4,910 Related party liabilities (1,134 ) - Other liabilities 10,515 764 Net cash used in operating activities (43,263 ) (27,398 ) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property and equipment (5,234 ) (2,893 ) Net cash used in investing activities (5,234 ) (2,893 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings on long-term debt, net 62,000 184,000 Principal payments of debt (125 ) (121,881 ) Payments of debt issuance costs (398 ) (6,174 ) Collateral for letters of credit - (5,439 ) Net cash provided by financing activities 61,477 50,505 NET INCREASE IN CASH AND CASH EQUIVALENTS 12,980 20,214 Cash and cash equivalents - beginning of period 41,626 47,917 CASH AND CASH EQUIVALENTS - END OF PERIOD $ 54,605 $ 68,130 Three Months Ended Non-GAAP Financial Summary* Pro Forma** (in thousands) Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Medicare risk-based revenue $ 66,618 $ 76,428 $ 91,277 $ 107,747 $ 143,664 $ 122,267 $ 113,041 $ 121,593 $ 155,486 Medicaid risk-based revenue 20,454 20,884 20,160 20,165 19,896 19,852 36,620 25,626 30,054 Government value-based care revenue - - - - - - - 10,010 22,206 Other revenue 4,839 7,308 6,869 9,008 8,719 15,551 14,602 15,754 16,694 Total revenue 91,911 104,620 118,306 136,920 172,279 157,670 164,263 172,983 224,440 External provider costs 70,466 73,329 79,724 92,856 120,348 106,900 104,078 110,673 156,995 Cost of care 13,246 20,315 22,606 26,854 30,293 30,150 34,581 37,627 38,865 Platform contribution 8,199 10,976 15,977 17,210 21,638 20,620 25,604 24,683 28,580 Platform contribution margin (%) 8.9 % 10.5 % 13.5 % 12.6 % 12.6 % 13.1 % 15.6 % 14.3 % 12.7 % Sales and marketing 1,688 1,274 2,615 3,301 2,299 2,355 3,806 3,765 3,381 Corporate, general and administrative 7,589 9,715 11,228 10,873 12,165 13,877 17,263 21,329 18,158 Adjusted operating expenses 9,277 10,988 13,843 14,174 14,464 16,232 21,069 25,094 21,539 Adjusted EBITDA n/a $ (13 ) $ 2,134 $ 3,035 $ 7,175 $ 4,388 $ 4,535 $ (411 ) $ 7,042 Pro Forma Adjusted EBITDA $ (1,078 ) n/a n/a n/a n/a n/a n/a n/a n/a * For period ended June 30, 2021, figures give effect to the Business Combinations of IMC and Care Holdings as if they had occurred on January 1, 2021. ** For period ended June 30, 2021, the measure was calculated in a manner consistent with the concepts of Article 8 of Regulation S-X and represents Pro Forma Platform Contribution. Reconciliation to Adjusted EBITDA and Pro Forma Adjusted EBITDA* Three Months Ended (in thousands) Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Net Income (loss) $ 10,057 $ (14,479 ) $ (3,553 ) $ (16,797 ) $ (9,381 ) $ (22,052 ) $ 10,434 $ (82,082 ) $ (32,376 ) Interest expense 792 1,291 1,905 1,728 3,896 6,076 8,542 10,711 13,197 Depreciation and amortization 1,437 5,176 6,089 5,062 4,903 4,573 7,180 6,576 6,828 Remeasurement of warrant and contingent earnout liabilities (19,215 ) 1,398 (8,734 ) 3,536 (7,391 ) 7,331 (84,171 ) (37,242 ) 15,786 Goodwill impairment - - - - - - 70,000 98,000 - Stock-based compensation - 966 375 1,087 2,788 3,611 2,786 2,298 2,464 Loss (gain) on extinguishment of debt, net (1,358 ) (279 ) 7 - 6,172 - - - - Business Combination integration costs (1) 3,278 3,176 2,277 4,379 1,887 2,586 163 716 686 Acquisition and integration related costs (2) 3,806 1,871 2,325 3,429 4,074 2,118 10,632 622 815 DeSpac costs 4,721 27 742 9 10 11 10 - - Other (3) (1,203 ) 840 543 421 46 (46 ) (967 ) (187 ) (535 ) Income tax provision (benefit) - - 159 181 171 181 (20,074 ) 177 177 Adjusted EBITDA n/a $ (13 ) $ 2,134 $ 3,035 $ 7,175 $ 4,388 $ 4,535 $ (411 ) $ 7,042 Pro forma adjustments (4) (3,393 ) - - - - - - - - Pro forma Adjusted EBITDA $ (1,078 ) n/a n/a n/a n/a n/a n/a n/a n/a * For period ended June 30, 2021, figures give effect to the Business Combinations of IMC and Care Holdings as if they had occurred on January 1, 2021. The Company has updated its calculation of Adjusted EBITDA on a retrospective basis to no longer add back certain compensation costs for stay-on bonuses and duplicative salaries previously included within the Business Combination integration costs adjustment. Memo: De novo pre-opening costs $ 19 $ 544 $ 806 $ 973 $ 506 $ 2,426 $ 3,205 $ 1,975 $ 1,560 De novo post-opening costs 364 195 489 1,119 993 1,533 2,274 3,885 4,228 (1) Represents initial costs to set up public company processes, incremental vendor expenses identified as temporary or duplicative and expected to be rationalized in the short term, and legal and professional expenses outside of the ordinary course of business, which are being incurred as part of the Company’s efforts as it integrates the two privately held companies that were combined in the Business Combination. Significant components of Business Combination integration costs were as follows: Three Months Ended (in thousands) Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Consulting and legal fees (a) $ 3,142 $ 2,204 $ 1,639 $ 3,190 $ 887 $ 725 $ 257 $ 282 $ 237 Severance costs - - 949 25 252 1,080 167 11 13 Other (b) 137 972 (311 ) 1,164 748 782 (261 ) 423 436 $ 3,278 $ 3,176 $ 2,277 $ 4,379 $ 1,887 $ 2,586 $ 163 $ 716 $ 686 (a) Represents consulting and legal costs directly associated with efforts related to integration of the two privately held companies that were combined in the Business Combination. (b) Represents primarily vendor expenses identified as temporary or duplicative and/or expenses outside the ordinary course of business and not necessary to run the Company's business. (2) Includes all costs recognized in acquisition related costs in our consolidated statements of operations and incremental payroll compensation expense for employees directly associated with services to achieve synergies related to closed transactions. Significant components of acquisition and integration related costs were as follows: Three Months Ended (in thousands) Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Advisor and other professinal fees (a) $ 3,257 $ 1,183 $ 1,183 $ 1,622 $ 2,359 $ 1,219 $ 9,877 $ (258 ) $ (34 ) Compensation costs (b) 549 688 1,142 1,808 1,715 899 755 880 849 $ 3,806 $ 1,871 $ 2,325 $ 3,429 $ 4,074 $ 2,118 $ 10,632 $ 622 $ 815 (a) Includes payments to our third-party transaction advisory firm associated with transaction contracts, including the Steward transaction that was closed in November 2022. Also, costs include legal and accounting fees directly associated with contemplated or closed transactions. (b) Includes incremental payroll compensation expense for employees directly associated with services to achieve synergies related to closed transactions. (3) Components of other were as follows: Three Months Ended (in thousands) Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Subrogation income $ (1,000 ) $ - $ - $ - $ - $ - $ - $ - $ - Software sale - - - - - - (1,000 ) - - Tax-related costs - 266 95 265 69 (178 ) 46 - - Legal settlement - 75 229 - (43 ) - - - - Interest income - - - - - - - (253 ) (602 ) Other (203 ) 499 219 156 19 133 (13 ) 66 67 $ (1,203 ) $ 840 $ 543 $ 421 $ 46 $ (46 ) $ (967 ) $ (187 ) $ (535 ) (4) Components of the pro forma adjustments were as follows: (in thousands) Three Months Ended June 30, 2021 IMC Adjusted EBITDA prior to the Business Combination(a) $ (3,460 ) Care Holdings Adjusted EBITDA prior to the Business Combination(a) 55 Other pro forma adjustments 12 Total pro forma adjustments $ (3,393 ) (a) The following table provides a reconciliation of net income (loss), the most closely comparable GAAP financial measure, to Adjusted EBITDA, for the results of IMC and Care Holdings prior to the Business Combination. Three Months Ended June 30, 2021 (in thousands) IMC Care Holdings Net income (loss) $ (6,151 ) $ 55 Depreciation and amortization 1,066 - Interest expense 1,625 - Adjusted EBITDA $ (3,460 ) $ 55 Pro Forma** Non-GAAP Operating Metrics Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Centers 34 40 45 48 48 51 62 62 62 Markets 2 3 4 6 6 7 7 7 7 Patients (MCREM)* 35,300 40,400 50,100 50,600 54,000 57,400 221,500 225,100 226,500 Patients in value-based care arrangements (MCREM) 84.1 % 87.2 % 79.3 % 79.8 % 81.0 % 78.2 % 97.6 % 99.0 % 99.4 % Platform Contribution ($, millions)** $ 8.2 $ 11.0 $ 16.0 $ 17.2 $ 21.6 $ 20.6 $ 25.6 $ 24.7 $ 28.6 * MCREM defined as Medicare Equivalent Members, which assumes the level of support received by a Medicare patient is equivalent to that received by three Medicaid or Commercial patients. ** For period ended June 30, 2021, the measure was calculated in a manner consistent with the concepts of Article 8 of Regulation S-X and represents Pro Forma Platform Contribution. Reconciliation to Platform Contribution and Pro forma Platform Contribution (in millions) Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Gross profit (a) $ 0.1 $ 4.5 $ 9.6 $ 11.2 $ 15.4 $ 14.8 $ 17.2 $ 17.1 $ 20.4 Depreciation and amortization 1.4 5.2 6.1 5.1 4.9 4.6 7.2 6.6 6.8 Stock-based compensation - - 0.1 0.4 1.3 1.2 1.2 1.0 1.3 Pro forma adjustments (b) 6.7 - - - - - - - - Other adjustments (c) - 1.3 0.2 0.5 0.1 0.1 - - - Pro forma Platform Contribution $ 8.2 n/a n/a n/a n/a n/a n/a n/a n/a Platform Contribution n/a $ 11.0 $ 16.0 17.2 $ 21.6 $ 20.6 $ 25.6 $ 24.7 $ 28.6 (a) Gross profit reflects the reclassification of stock-based compensation expense previously included in corporate, general and administrative expenses, which decreased gross profit by $0.1 million during the three months ended December 31, 2021, $0.4 million during the three months ended March 31, 2022, $1.3 million during the three months ended June 30, 2022, $1.2 million during the three months ended September 30, 2022, and $1.2 million during the three months ended December 31, 2022. (b) Pro Forma adjustments are computed in a manner consistent with the concepts of Article 8 of Regulation S-X and give effect to the Business Combinations of IMC and Care Holdings as if they had occurred on January 1, 2021. Components of the pro forma adjustments were as follows: Three Months Ended June 30, 2021 (in thousands) IMC Care Holdings Total Gross profit prior to Business Combination $ 4,682 $ 932 $ 5,614 Depreciation and amortization prior to Business Combination 1,066 1 1,067 Pro forma adjustment $ 5,748 $ 933 $ 6,681 (c) Other adjustments include incremental costs primarily related to post-Business Combination integration initiatives. Other adjustments reflected during the three months ended September 30, 2021 include $0.6 million of incremental costs relating to one-time operational projects and $0.3 million of non-cash true-up of deferred rent expense. Other adjustments reflected during the three months ended March 31, 2022 include $0.3 million of costs for a pilot project regarding outsourcing. Calculation of the Medical Expense Ratio Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 External provider costs $ 156,995 $ 120,348 $ 267,668 $ 213,204 Medicare and Medicaid risk-based revenue 185,540 163,560 332,759 291,472 Medical Expense Ratio 84.6 % 73.6 % 80.4 % 73.1 % View source version on businesswire.com: https://www.businesswire.com/news/home/20230809611138/en/Contacts Investor Relations Samantha Swerdlin VP, Investor Relations ir@caremax.com Media Jaime Ameglio Marketing & Communications Director media@caremax.com Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
CareMax Reports Second Quarter 2023 Results By: CareMax, Inc. via Business Wire August 09, 2023 at 06:55 AM EDT Second Quarter Medicare Advantage Membership of 102,500, up 177% year-over-year Second Quarter Total Revenue of $224.4 million, up 30% year-over-year Raising Full Year 2023 Revenue Guidance; Reaffirming Full Year 2023 Adjusted EBITDA Guidance CareMax, Inc. (NASDAQ: CMAX; CMAXW) (“CareMax” or the “Company”), a leading technology-enabled value-based care delivery system, today announced financial results for the second quarter ended June 30, 2023. “We continued to deliver on our growth strategy, ending the quarter with 102,500 Medicare Advantage members, up 177% year-over-year, and have confidence in achieving both our near and long-term membership targets that we announced at our investor day in March. Our second quarter performance was strong, excluding the impact of an unfavorable $7 million prior year development related to a Medicaid contract from 2022. Looking ahead, we are encouraged by the underlying performance of our business in the first half of the year and are raising our full year 2023 revenue guidance while reaffirming our adjusted EBITDA guidance range,” said Carlos de Solo, Chief Executive Officer. Mr. de Solo continues, “At CareMax, our mission is to provide better care to seniors across the country. We believe our fully-integrated care model, powered by our proprietary built technology platform and highly scalable operating model, positions us well to achieve the long term goals we announced in March. We are excited for the next few years as we expect to continue to accelerate our growth and expand access to high-quality care for seniors nationwide.” Second Quarter 2023 Results Total membership of 272,500, up 210% year-over-year. Medicare Advantage Membership of 102,500, up 177% year-over-year. Total revenue was $224.4 million, up 30% year-over-year. Net loss was $32.4 million, compared to net loss of $9.4 million for the second quarter of 2022. Adjusted EBITDA was $7.0 million, compared to $7.2 million for the second quarter of 2022.1 Platform Contribution was $28.6 million, compared to $21.6 million for the second quarter of 2022.1 Medical Expense Ratio was 84.6%, compared to 73.6% for the second quarter of 2022. De novo pre-opening costs and post-opening losses for the second quarter of 2023 were $5.8 million.2 Financial Outlook for Full Year 2023 CareMax is raising the following full year 2023 financial guidance: Total revenue of $750 to $800 million, up 19% to 27% year-over-year, from prior guidance of $700 million to $750 million. CareMax is reaffirming the following full year 2023 financial guidance: Year-end Medicare Advantage membership of 110,000 to 120,000, up 18% to 28% year-over-year. Adjusted EBITDA of $25 million to $35 million, up 31% to 83% year-over-year, compared to $19.1 million for the year-ended December 31, 2022.1 De novo pre-opening costs and post-opening losses are anticipated to be approximately $25 million in 2023. 1 Adjusted EBITDA and Platform Contribution are non-GAAP financial metrics. A reconciliation of non-GAAP metrics to the most directly comparable GAAP financial measures is included in the appendix to this earnings release. Beginning with the three months ended June 30, 2023, the Company has updated its calculation of Adjusted EBITDA on a retrospective basis to no longer add back certain compensation costs for stay-on bonuses and duplicative salaries previously included within the Business Combination integration costs adjustment. Adjusted EBITDA as previously reported for the second quarter of 2022 included an addback of $0.7 million for stay-on bonuses and duplicative salaries. Adjusted EBITDA as previously reported for the year ended December 31, 2022 included an addback of $2.9 million for stay-on bonuses and duplicative salaries. 2 De novo pre-opening costs represent (1) incremental payroll costs from employees specifically associated with the operational, contractual, physical, or regulatory infrastructure for de novo centers, prior to their opening; (2) legal costs directly associated with the de novo centers, incurred prior to their opening, which includes services such as execution of leases, health plan contracts and other agreements; (3) other expenses related to diligence, design, permitting, and other “soft costs” at new sites; and (4) rent and facility expenses prior to center opening. De novo post-opening losses include center-level operating losses recognized at a de novo center until the center breaks even, up to 18 months after opening, which consist of revenue, external provider costs and cost of care allocated for the de novo center. Conference Call Details Management will host a conference call at 8:30 am ET today to discuss the results. The conference call can be accessed by dialing (888) 330-2508 for U.S. participants, or (240) 789-2735 for international participants, and referencing conference ID 7874605. A live audio webcast as well as related presentation materials will also be available on the “Events & Presentations” section of CareMax’s investor relations website at ir.caremax.com. Following the live call, a replay will be available on the Company's website. About CareMax Founded in 2011, CareMax is a value-based care delivery system that utilizes a proprietary technology-enabled platform and multi-specialty, whole person health model to deliver comprehensive, preventative and coordinated care for its members. With over 200,000 Medicare Value-Based Care Members across 10 states, and fully integrated, Five-Star Quality rated health and wellness centers, CareMax is redefining healthcare across the country by reducing costs, improving overall outcomes and promoting health equity for seniors. Learn more at www.caremax.com. Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements include statements regarding our future growth, strategy and financial performance. Words such as "anticipate," "believe," "budget," "contemplate," "continue," "could," "envision," "estimate," "expect," "guidance," "indicate," "intend," "may," "might," "plan," "possibly," "potential," "predict," "probably," "pro forma," "project," "seek," "should," "target," or "will," or the negative or other variations thereof, and similar words or phrases or comparable terminology, are intended to identify forward-looking statements. These forward-looking statements reflect the Company’s expectations, plans or forecasts of future events and views as of the date of this press release. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important risks and uncertainties that could cause the Company's actual results and financial condition to differ materially from those indicated in forward-looking statements include, among others, the Company’s ability to integrate acquired businesses, including the ability to implement business plans, forecasts, and other expectations after the completion of the Steward transaction; the failure to realize anticipated benefits of the Steward transaction or to realize estimated pro forma results and underlying assumptions; the impact of COVID-19 or any variant thereof or any other pandemic or epidemic on the Company's business and results of operation; the Company’s ability to attract new patients; the availability of sites for de novo centers and the costs of opening such de novo centers; changes in market or industry conditions, regulatory environment, competitive conditions, and receptivity to the Company's services; the Company's ability to continue its growth, including in new markets; changes in laws and regulations applicable to the Company's business, in particular with respect to Medicare Advantage and Medicaid; the Company's ability to maintain its relationships with health plans and other key payers; any delay, modification or cancellation of government contracts; the Company's future capital requirements and sources and uses of cash, including funds to satisfy its liquidity needs and the Company’s ability to comply with the covenants under the agreements governing its indebtedness; the Company’s ability to address the material weakness in its internal control over financial reporting; the Company's ability to recruit and retain qualified team members and independent physicians; risks related to future acquisitions; the Company’s ability to develop and maintain proper and effective internal control over financial reporting and the impact of any prior period developments. For a detailed discussion of the risk factors that could affect the Company's actual results, please refer to the risk factors identified in the Company's reports filed with the SEC. All information provided in this press release is as of the date hereof, and the Company undertakes no duty to update or revise this information unless required by law, and forward-looking statements should not be relied upon as representing the Company’s assessments as of any date subsequent to the date of this press release. Use of Non-GAAP Financial Information Certain financial information and data contained in this press release is unaudited and does not conform to Regulation S-X. Accordingly, such information and data may not be included in, may be adjusted in, or may be presented differently in, any periodic filing, information or proxy statement, or prospectus or registration statement to be filed by the Company with the SEC. Some of the financial information and data contained in this press release, such as Adjusted EBITDA and Platform Contribution and margin thereof have not been prepared in accordance with United States generally accepted accounting principles (“GAAP”). These non-GAAP measures of financial results are not GAAP measures of our financial results or liquidity and should not be considered as an alternative to net income (loss) as a measure of financial results, cash flows from operating activities as a measure of liquidity, or any other performance measure derived in accordance with GAAP. The Company believes these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and results of operations. The Company’s management uses these non-GAAP measures for trend analyses and for budgeting and planning purposes. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating projected operating results and trends in and in comparing the Company’s financial measures with other similar companies, many of which present similar non-GAAP financial measures to investors. Management does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. For this reason, these non-GAAP measures may not be comparable to other companies’ similarly labeled non-GAAP financial measures. In order to compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results. A reconciliation for Adjusted EBITDA and Platform Contribution to the most directly comparable GAAP financial measures is included below. A reconciliation of projected 2023 Adjusted EBITDA to the most directly comparable GAAP financial measure is not included in this press release because, without unreasonable efforts, the Company is unable to predict with reasonable certainty the amount or timing of non-GAAP adjustments that are used to calculate this. In addition, the Company believes such a reconciliation would imply a degree of precision and certainty that could be confusing to investors. The variability of the specified items may have a significant and unpredictable impact on the Company’s future GAAP results. Use of Pro Forma Financial Information and Pro Forma Non-GAAP Financial Information Certain of the information presented in the Non-GAAP Financial Summary and in the reconciliations to non-GAAP financial measures includes pro forma information derived from the unaudited pro forma statements of operations which are provided for informational purposes only and are not necessarily indicative of the operating results or financial position that would have occurred if the acquisitions of IMC and Care Holdings had occurred in the stated historical periods, nor are they indicative of the future results or financial position of the combined company. The unaudited pro forma statements of operations do not give effect to the potential impact of any anticipated synergies, operating efficiencies or cost savings that may result from the acquisitions of IMC and Care Holdings, any integration costs or tax deductibility of transaction costs. Additionally, Adjusted EBITDA presented on a pro forma basis gives effect to the acquisitions of IMC and Care Holdings as if they had occurred in historical periods. Such non-GAAP financial measures do not necessarily reflect what the Company’s Adjusted EBITDA would have been had the acquisitions occurred on the dates indicated. CAREMAX, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) (Unaudited) June 30, 2023 December 31, 2022 ASSETS Current Assets Cash and cash equivalents $ 54,605 $ 41,626 Accounts receivable, net 159,812 151,036 Risk settlement assets 717 707 Other current assets 3,516 3,968 Total Current Assets 218,650 197,336 Property and equipment, net 24,628 21,006 Operating lease right-of-use assets 131,207 108,937 Goodwill, net 602,643 700,643 Intangible assets, net 112,537 123,585 Deferred debt issuance costs 1,052 1,685 Other assets 60,249 17,550 Total Assets $ 1,150,965 $ 1,170,743 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable $ 8,677 $ 7,687 Accrued expenses 12,634 16,854 Risk settlement liabilities 15,656 14,171 Related party liabilities 13,410 1,777 Related party debt, net 32,997 30,277 Current portion of third-party debt, net 276 253 Current portion of operating lease liabilities 7,116 5,512 Other current liabilities 7,303 790 Total Current Liabilities 98,069 77,322 Derivative warrant liabilities 2,434 3,974 Long-term debt, net 298,481 230,725 Long-term operating lease liabilities 116,187 96,539 Contingent earnout liability - 134,561 Other liabilities 11,297 8,075 Total Liabilities 526,469 551,196 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Preferred stock (1,000,000 shares authorized; one share issued and outstanding as of June 30, 2023 and December 31, 2022) - - Class A common stock ($0.0001 par value; 250,000,000 shares authorized; 112,072,237 and 111,332,584 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively) 11 11 Additional paid-in-capital 776,533 657,126 Accumulated deficit (152,048 ) (37,590 ) Total Stockholders' Equity 624,496 619,547 Total Liabilities and Stockholders' Equity $ 1,150,965 $ 1,170,743 CAREMAX, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share data) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Revenue Medicare risk-based revenue $ 155,486 $ 143,664 $ 277,079 $ 251,410 Medicaid risk-based revenue 30,054 19,896 55,680 40,062 Government value-based care revenue 22,206 - 32,216 - Other revenue 16,694 8,719 32,449 17,727 Total revenue 224,440 172,279 397,424 309,199 Operating expenses External provider costs 156,995 120,348 267,668 213,204 Cost of care 40,192 30,364 78,819 57,712 Sales and marketing 3,327 2,299 7,092 5,600 Corporate, general and administrative 20,795 18,063 44,739 37,041 Depreciation and amortization 6,828 4,903 13,404 9,965 Goodwill impairment - - 98,000 - Acquisition related costs 54 2,789 74 3,055 Total operating expenses 228,191 178,767 509,797 326,577 Operating loss (3,750 ) (6,488 ) (112,373 ) (17,378 ) Nonoperating income (expense) Interest expense (13,197 ) (3,896 ) (23,908 ) (5,624 ) Change in fair value of derivative warrant liabilities 434 7,391 1,540 3,855 Gain (loss) on remeasurement of contingent earnout liabilities (16,220 ) - 19,916 - Loss on extinguishment of debt, net - (6,172 ) - (6,172 ) Other income (expense), net 534 (45 ) 721 (507 ) (28,449 ) (2,722 ) (1,730 ) (8,448 ) Loss before income tax (32,199 ) (9,210 ) (114,103 ) (25,826 ) Income tax expense (177 ) (171 ) (355 ) (351 ) Net loss $ (32,376 ) $ (9,381 ) $ (114,458 ) $ (26,178 ) Weighted-average basic shares outstanding 111,671,302 87,422,917 111,511,214 87,395,596 Weighted-average diluted shares outstanding 111,671,302 87,422,917 111,511,214 87,395,596 Net loss per share Basic $ (0.29 ) $ (0.11 ) $ (1.03 ) $ (0.30 ) Diluted $ (0.29 ) $ (0.11 ) $ (1.03 ) $ (0.30 ) CAREMAX, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited) Six Months Ended June 30, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (114,458 ) $ (26,178 ) Adjustments to reconcile net loss to cash and cash equivalents Depreciation and amortization expense 13,404 9,965 Amortization of debt issuance costs and discounts 4,086 753 Stock-based compensation expense 4,762 3,875 Income tax provision 355 351 Change in fair value of derivative warrant liabilities (1,540 ) (3,855 ) Loss (gain) on remeasurement of contingent earnout liabilities (19,916 ) - Loss (gain) on extinguishment of debt - 6,172 Payment-in-kind interest expense 5,500 1,078 Provision for credit losses 57 - Goodwill impairment 98,000 - Amortization of right-of-use assets 5,842 - Other non-cash, net 1,213 60 Changes in operating assets and liabilities: Accounts receivable (1,255 ) (29,976 ) Other current assets 452 (504 ) Risk settlement assets and liabilities 1,968 19 Other assets (41,807 ) (105 ) Operating lease liabilities (4,959 ) - Accounts payable (128 ) 5,273 Accrued expenses (4,219 ) 4,910 Related party liabilities (1,134 ) - Other liabilities 10,515 764 Net cash used in operating activities (43,263 ) (27,398 ) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property and equipment (5,234 ) (2,893 ) Net cash used in investing activities (5,234 ) (2,893 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings on long-term debt, net 62,000 184,000 Principal payments of debt (125 ) (121,881 ) Payments of debt issuance costs (398 ) (6,174 ) Collateral for letters of credit - (5,439 ) Net cash provided by financing activities 61,477 50,505 NET INCREASE IN CASH AND CASH EQUIVALENTS 12,980 20,214 Cash and cash equivalents - beginning of period 41,626 47,917 CASH AND CASH EQUIVALENTS - END OF PERIOD $ 54,605 $ 68,130 Three Months Ended Non-GAAP Financial Summary* Pro Forma** (in thousands) Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Medicare risk-based revenue $ 66,618 $ 76,428 $ 91,277 $ 107,747 $ 143,664 $ 122,267 $ 113,041 $ 121,593 $ 155,486 Medicaid risk-based revenue 20,454 20,884 20,160 20,165 19,896 19,852 36,620 25,626 30,054 Government value-based care revenue - - - - - - - 10,010 22,206 Other revenue 4,839 7,308 6,869 9,008 8,719 15,551 14,602 15,754 16,694 Total revenue 91,911 104,620 118,306 136,920 172,279 157,670 164,263 172,983 224,440 External provider costs 70,466 73,329 79,724 92,856 120,348 106,900 104,078 110,673 156,995 Cost of care 13,246 20,315 22,606 26,854 30,293 30,150 34,581 37,627 38,865 Platform contribution 8,199 10,976 15,977 17,210 21,638 20,620 25,604 24,683 28,580 Platform contribution margin (%) 8.9 % 10.5 % 13.5 % 12.6 % 12.6 % 13.1 % 15.6 % 14.3 % 12.7 % Sales and marketing 1,688 1,274 2,615 3,301 2,299 2,355 3,806 3,765 3,381 Corporate, general and administrative 7,589 9,715 11,228 10,873 12,165 13,877 17,263 21,329 18,158 Adjusted operating expenses 9,277 10,988 13,843 14,174 14,464 16,232 21,069 25,094 21,539 Adjusted EBITDA n/a $ (13 ) $ 2,134 $ 3,035 $ 7,175 $ 4,388 $ 4,535 $ (411 ) $ 7,042 Pro Forma Adjusted EBITDA $ (1,078 ) n/a n/a n/a n/a n/a n/a n/a n/a * For period ended June 30, 2021, figures give effect to the Business Combinations of IMC and Care Holdings as if they had occurred on January 1, 2021. ** For period ended June 30, 2021, the measure was calculated in a manner consistent with the concepts of Article 8 of Regulation S-X and represents Pro Forma Platform Contribution. Reconciliation to Adjusted EBITDA and Pro Forma Adjusted EBITDA* Three Months Ended (in thousands) Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Net Income (loss) $ 10,057 $ (14,479 ) $ (3,553 ) $ (16,797 ) $ (9,381 ) $ (22,052 ) $ 10,434 $ (82,082 ) $ (32,376 ) Interest expense 792 1,291 1,905 1,728 3,896 6,076 8,542 10,711 13,197 Depreciation and amortization 1,437 5,176 6,089 5,062 4,903 4,573 7,180 6,576 6,828 Remeasurement of warrant and contingent earnout liabilities (19,215 ) 1,398 (8,734 ) 3,536 (7,391 ) 7,331 (84,171 ) (37,242 ) 15,786 Goodwill impairment - - - - - - 70,000 98,000 - Stock-based compensation - 966 375 1,087 2,788 3,611 2,786 2,298 2,464 Loss (gain) on extinguishment of debt, net (1,358 ) (279 ) 7 - 6,172 - - - - Business Combination integration costs (1) 3,278 3,176 2,277 4,379 1,887 2,586 163 716 686 Acquisition and integration related costs (2) 3,806 1,871 2,325 3,429 4,074 2,118 10,632 622 815 DeSpac costs 4,721 27 742 9 10 11 10 - - Other (3) (1,203 ) 840 543 421 46 (46 ) (967 ) (187 ) (535 ) Income tax provision (benefit) - - 159 181 171 181 (20,074 ) 177 177 Adjusted EBITDA n/a $ (13 ) $ 2,134 $ 3,035 $ 7,175 $ 4,388 $ 4,535 $ (411 ) $ 7,042 Pro forma adjustments (4) (3,393 ) - - - - - - - - Pro forma Adjusted EBITDA $ (1,078 ) n/a n/a n/a n/a n/a n/a n/a n/a * For period ended June 30, 2021, figures give effect to the Business Combinations of IMC and Care Holdings as if they had occurred on January 1, 2021. The Company has updated its calculation of Adjusted EBITDA on a retrospective basis to no longer add back certain compensation costs for stay-on bonuses and duplicative salaries previously included within the Business Combination integration costs adjustment. Memo: De novo pre-opening costs $ 19 $ 544 $ 806 $ 973 $ 506 $ 2,426 $ 3,205 $ 1,975 $ 1,560 De novo post-opening costs 364 195 489 1,119 993 1,533 2,274 3,885 4,228 (1) Represents initial costs to set up public company processes, incremental vendor expenses identified as temporary or duplicative and expected to be rationalized in the short term, and legal and professional expenses outside of the ordinary course of business, which are being incurred as part of the Company’s efforts as it integrates the two privately held companies that were combined in the Business Combination. Significant components of Business Combination integration costs were as follows: Three Months Ended (in thousands) Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Consulting and legal fees (a) $ 3,142 $ 2,204 $ 1,639 $ 3,190 $ 887 $ 725 $ 257 $ 282 $ 237 Severance costs - - 949 25 252 1,080 167 11 13 Other (b) 137 972 (311 ) 1,164 748 782 (261 ) 423 436 $ 3,278 $ 3,176 $ 2,277 $ 4,379 $ 1,887 $ 2,586 $ 163 $ 716 $ 686 (a) Represents consulting and legal costs directly associated with efforts related to integration of the two privately held companies that were combined in the Business Combination. (b) Represents primarily vendor expenses identified as temporary or duplicative and/or expenses outside the ordinary course of business and not necessary to run the Company's business. (2) Includes all costs recognized in acquisition related costs in our consolidated statements of operations and incremental payroll compensation expense for employees directly associated with services to achieve synergies related to closed transactions. Significant components of acquisition and integration related costs were as follows: Three Months Ended (in thousands) Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Advisor and other professinal fees (a) $ 3,257 $ 1,183 $ 1,183 $ 1,622 $ 2,359 $ 1,219 $ 9,877 $ (258 ) $ (34 ) Compensation costs (b) 549 688 1,142 1,808 1,715 899 755 880 849 $ 3,806 $ 1,871 $ 2,325 $ 3,429 $ 4,074 $ 2,118 $ 10,632 $ 622 $ 815 (a) Includes payments to our third-party transaction advisory firm associated with transaction contracts, including the Steward transaction that was closed in November 2022. Also, costs include legal and accounting fees directly associated with contemplated or closed transactions. (b) Includes incremental payroll compensation expense for employees directly associated with services to achieve synergies related to closed transactions. (3) Components of other were as follows: Three Months Ended (in thousands) Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Subrogation income $ (1,000 ) $ - $ - $ - $ - $ - $ - $ - $ - Software sale - - - - - - (1,000 ) - - Tax-related costs - 266 95 265 69 (178 ) 46 - - Legal settlement - 75 229 - (43 ) - - - - Interest income - - - - - - - (253 ) (602 ) Other (203 ) 499 219 156 19 133 (13 ) 66 67 $ (1,203 ) $ 840 $ 543 $ 421 $ 46 $ (46 ) $ (967 ) $ (187 ) $ (535 ) (4) Components of the pro forma adjustments were as follows: (in thousands) Three Months Ended June 30, 2021 IMC Adjusted EBITDA prior to the Business Combination(a) $ (3,460 ) Care Holdings Adjusted EBITDA prior to the Business Combination(a) 55 Other pro forma adjustments 12 Total pro forma adjustments $ (3,393 ) (a) The following table provides a reconciliation of net income (loss), the most closely comparable GAAP financial measure, to Adjusted EBITDA, for the results of IMC and Care Holdings prior to the Business Combination. Three Months Ended June 30, 2021 (in thousands) IMC Care Holdings Net income (loss) $ (6,151 ) $ 55 Depreciation and amortization 1,066 - Interest expense 1,625 - Adjusted EBITDA $ (3,460 ) $ 55 Pro Forma** Non-GAAP Operating Metrics Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Centers 34 40 45 48 48 51 62 62 62 Markets 2 3 4 6 6 7 7 7 7 Patients (MCREM)* 35,300 40,400 50,100 50,600 54,000 57,400 221,500 225,100 226,500 Patients in value-based care arrangements (MCREM) 84.1 % 87.2 % 79.3 % 79.8 % 81.0 % 78.2 % 97.6 % 99.0 % 99.4 % Platform Contribution ($, millions)** $ 8.2 $ 11.0 $ 16.0 $ 17.2 $ 21.6 $ 20.6 $ 25.6 $ 24.7 $ 28.6 * MCREM defined as Medicare Equivalent Members, which assumes the level of support received by a Medicare patient is equivalent to that received by three Medicaid or Commercial patients. ** For period ended June 30, 2021, the measure was calculated in a manner consistent with the concepts of Article 8 of Regulation S-X and represents Pro Forma Platform Contribution. Reconciliation to Platform Contribution and Pro forma Platform Contribution (in millions) Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Gross profit (a) $ 0.1 $ 4.5 $ 9.6 $ 11.2 $ 15.4 $ 14.8 $ 17.2 $ 17.1 $ 20.4 Depreciation and amortization 1.4 5.2 6.1 5.1 4.9 4.6 7.2 6.6 6.8 Stock-based compensation - - 0.1 0.4 1.3 1.2 1.2 1.0 1.3 Pro forma adjustments (b) 6.7 - - - - - - - - Other adjustments (c) - 1.3 0.2 0.5 0.1 0.1 - - - Pro forma Platform Contribution $ 8.2 n/a n/a n/a n/a n/a n/a n/a n/a Platform Contribution n/a $ 11.0 $ 16.0 17.2 $ 21.6 $ 20.6 $ 25.6 $ 24.7 $ 28.6 (a) Gross profit reflects the reclassification of stock-based compensation expense previously included in corporate, general and administrative expenses, which decreased gross profit by $0.1 million during the three months ended December 31, 2021, $0.4 million during the three months ended March 31, 2022, $1.3 million during the three months ended June 30, 2022, $1.2 million during the three months ended September 30, 2022, and $1.2 million during the three months ended December 31, 2022. (b) Pro Forma adjustments are computed in a manner consistent with the concepts of Article 8 of Regulation S-X and give effect to the Business Combinations of IMC and Care Holdings as if they had occurred on January 1, 2021. Components of the pro forma adjustments were as follows: Three Months Ended June 30, 2021 (in thousands) IMC Care Holdings Total Gross profit prior to Business Combination $ 4,682 $ 932 $ 5,614 Depreciation and amortization prior to Business Combination 1,066 1 1,067 Pro forma adjustment $ 5,748 $ 933 $ 6,681 (c) Other adjustments include incremental costs primarily related to post-Business Combination integration initiatives. Other adjustments reflected during the three months ended September 30, 2021 include $0.6 million of incremental costs relating to one-time operational projects and $0.3 million of non-cash true-up of deferred rent expense. Other adjustments reflected during the three months ended March 31, 2022 include $0.3 million of costs for a pilot project regarding outsourcing. Calculation of the Medical Expense Ratio Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 External provider costs $ 156,995 $ 120,348 $ 267,668 $ 213,204 Medicare and Medicaid risk-based revenue 185,540 163,560 332,759 291,472 Medical Expense Ratio 84.6 % 73.6 % 80.4 % 73.1 % View source version on businesswire.com: https://www.businesswire.com/news/home/20230809611138/en/Contacts Investor Relations Samantha Swerdlin VP, Investor Relations ir@caremax.com Media Jaime Ameglio Marketing & Communications Director media@caremax.com
Second Quarter Medicare Advantage Membership of 102,500, up 177% year-over-year Second Quarter Total Revenue of $224.4 million, up 30% year-over-year Raising Full Year 2023 Revenue Guidance; Reaffirming Full Year 2023 Adjusted EBITDA Guidance
CareMax, Inc. (NASDAQ: CMAX; CMAXW) (“CareMax” or the “Company”), a leading technology-enabled value-based care delivery system, today announced financial results for the second quarter ended June 30, 2023. “We continued to deliver on our growth strategy, ending the quarter with 102,500 Medicare Advantage members, up 177% year-over-year, and have confidence in achieving both our near and long-term membership targets that we announced at our investor day in March. Our second quarter performance was strong, excluding the impact of an unfavorable $7 million prior year development related to a Medicaid contract from 2022. Looking ahead, we are encouraged by the underlying performance of our business in the first half of the year and are raising our full year 2023 revenue guidance while reaffirming our adjusted EBITDA guidance range,” said Carlos de Solo, Chief Executive Officer. Mr. de Solo continues, “At CareMax, our mission is to provide better care to seniors across the country. We believe our fully-integrated care model, powered by our proprietary built technology platform and highly scalable operating model, positions us well to achieve the long term goals we announced in March. We are excited for the next few years as we expect to continue to accelerate our growth and expand access to high-quality care for seniors nationwide.” Second Quarter 2023 Results Total membership of 272,500, up 210% year-over-year. Medicare Advantage Membership of 102,500, up 177% year-over-year. Total revenue was $224.4 million, up 30% year-over-year. Net loss was $32.4 million, compared to net loss of $9.4 million for the second quarter of 2022. Adjusted EBITDA was $7.0 million, compared to $7.2 million for the second quarter of 2022.1 Platform Contribution was $28.6 million, compared to $21.6 million for the second quarter of 2022.1 Medical Expense Ratio was 84.6%, compared to 73.6% for the second quarter of 2022. De novo pre-opening costs and post-opening losses for the second quarter of 2023 were $5.8 million.2 Financial Outlook for Full Year 2023 CareMax is raising the following full year 2023 financial guidance: Total revenue of $750 to $800 million, up 19% to 27% year-over-year, from prior guidance of $700 million to $750 million. CareMax is reaffirming the following full year 2023 financial guidance: Year-end Medicare Advantage membership of 110,000 to 120,000, up 18% to 28% year-over-year. Adjusted EBITDA of $25 million to $35 million, up 31% to 83% year-over-year, compared to $19.1 million for the year-ended December 31, 2022.1 De novo pre-opening costs and post-opening losses are anticipated to be approximately $25 million in 2023. 1 Adjusted EBITDA and Platform Contribution are non-GAAP financial metrics. A reconciliation of non-GAAP metrics to the most directly comparable GAAP financial measures is included in the appendix to this earnings release. Beginning with the three months ended June 30, 2023, the Company has updated its calculation of Adjusted EBITDA on a retrospective basis to no longer add back certain compensation costs for stay-on bonuses and duplicative salaries previously included within the Business Combination integration costs adjustment. Adjusted EBITDA as previously reported for the second quarter of 2022 included an addback of $0.7 million for stay-on bonuses and duplicative salaries. Adjusted EBITDA as previously reported for the year ended December 31, 2022 included an addback of $2.9 million for stay-on bonuses and duplicative salaries. 2 De novo pre-opening costs represent (1) incremental payroll costs from employees specifically associated with the operational, contractual, physical, or regulatory infrastructure for de novo centers, prior to their opening; (2) legal costs directly associated with the de novo centers, incurred prior to their opening, which includes services such as execution of leases, health plan contracts and other agreements; (3) other expenses related to diligence, design, permitting, and other “soft costs” at new sites; and (4) rent and facility expenses prior to center opening. De novo post-opening losses include center-level operating losses recognized at a de novo center until the center breaks even, up to 18 months after opening, which consist of revenue, external provider costs and cost of care allocated for the de novo center. Conference Call Details Management will host a conference call at 8:30 am ET today to discuss the results. The conference call can be accessed by dialing (888) 330-2508 for U.S. participants, or (240) 789-2735 for international participants, and referencing conference ID 7874605. A live audio webcast as well as related presentation materials will also be available on the “Events & Presentations” section of CareMax’s investor relations website at ir.caremax.com. Following the live call, a replay will be available on the Company's website. About CareMax Founded in 2011, CareMax is a value-based care delivery system that utilizes a proprietary technology-enabled platform and multi-specialty, whole person health model to deliver comprehensive, preventative and coordinated care for its members. With over 200,000 Medicare Value-Based Care Members across 10 states, and fully integrated, Five-Star Quality rated health and wellness centers, CareMax is redefining healthcare across the country by reducing costs, improving overall outcomes and promoting health equity for seniors. Learn more at www.caremax.com. Forward-Looking Statements This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements include statements regarding our future growth, strategy and financial performance. Words such as "anticipate," "believe," "budget," "contemplate," "continue," "could," "envision," "estimate," "expect," "guidance," "indicate," "intend," "may," "might," "plan," "possibly," "potential," "predict," "probably," "pro forma," "project," "seek," "should," "target," or "will," or the negative or other variations thereof, and similar words or phrases or comparable terminology, are intended to identify forward-looking statements. These forward-looking statements reflect the Company’s expectations, plans or forecasts of future events and views as of the date of this press release. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important risks and uncertainties that could cause the Company's actual results and financial condition to differ materially from those indicated in forward-looking statements include, among others, the Company’s ability to integrate acquired businesses, including the ability to implement business plans, forecasts, and other expectations after the completion of the Steward transaction; the failure to realize anticipated benefits of the Steward transaction or to realize estimated pro forma results and underlying assumptions; the impact of COVID-19 or any variant thereof or any other pandemic or epidemic on the Company's business and results of operation; the Company’s ability to attract new patients; the availability of sites for de novo centers and the costs of opening such de novo centers; changes in market or industry conditions, regulatory environment, competitive conditions, and receptivity to the Company's services; the Company's ability to continue its growth, including in new markets; changes in laws and regulations applicable to the Company's business, in particular with respect to Medicare Advantage and Medicaid; the Company's ability to maintain its relationships with health plans and other key payers; any delay, modification or cancellation of government contracts; the Company's future capital requirements and sources and uses of cash, including funds to satisfy its liquidity needs and the Company’s ability to comply with the covenants under the agreements governing its indebtedness; the Company’s ability to address the material weakness in its internal control over financial reporting; the Company's ability to recruit and retain qualified team members and independent physicians; risks related to future acquisitions; the Company’s ability to develop and maintain proper and effective internal control over financial reporting and the impact of any prior period developments. For a detailed discussion of the risk factors that could affect the Company's actual results, please refer to the risk factors identified in the Company's reports filed with the SEC. All information provided in this press release is as of the date hereof, and the Company undertakes no duty to update or revise this information unless required by law, and forward-looking statements should not be relied upon as representing the Company’s assessments as of any date subsequent to the date of this press release. Use of Non-GAAP Financial Information Certain financial information and data contained in this press release is unaudited and does not conform to Regulation S-X. Accordingly, such information and data may not be included in, may be adjusted in, or may be presented differently in, any periodic filing, information or proxy statement, or prospectus or registration statement to be filed by the Company with the SEC. Some of the financial information and data contained in this press release, such as Adjusted EBITDA and Platform Contribution and margin thereof have not been prepared in accordance with United States generally accepted accounting principles (“GAAP”). These non-GAAP measures of financial results are not GAAP measures of our financial results or liquidity and should not be considered as an alternative to net income (loss) as a measure of financial results, cash flows from operating activities as a measure of liquidity, or any other performance measure derived in accordance with GAAP. The Company believes these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company’s financial condition and results of operations. The Company’s management uses these non-GAAP measures for trend analyses and for budgeting and planning purposes. The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating projected operating results and trends in and in comparing the Company’s financial measures with other similar companies, many of which present similar non-GAAP financial measures to investors. Management does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company’s financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. For this reason, these non-GAAP measures may not be comparable to other companies’ similarly labeled non-GAAP financial measures. In order to compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results. A reconciliation for Adjusted EBITDA and Platform Contribution to the most directly comparable GAAP financial measures is included below. A reconciliation of projected 2023 Adjusted EBITDA to the most directly comparable GAAP financial measure is not included in this press release because, without unreasonable efforts, the Company is unable to predict with reasonable certainty the amount or timing of non-GAAP adjustments that are used to calculate this. In addition, the Company believes such a reconciliation would imply a degree of precision and certainty that could be confusing to investors. The variability of the specified items may have a significant and unpredictable impact on the Company’s future GAAP results. Use of Pro Forma Financial Information and Pro Forma Non-GAAP Financial Information Certain of the information presented in the Non-GAAP Financial Summary and in the reconciliations to non-GAAP financial measures includes pro forma information derived from the unaudited pro forma statements of operations which are provided for informational purposes only and are not necessarily indicative of the operating results or financial position that would have occurred if the acquisitions of IMC and Care Holdings had occurred in the stated historical periods, nor are they indicative of the future results or financial position of the combined company. The unaudited pro forma statements of operations do not give effect to the potential impact of any anticipated synergies, operating efficiencies or cost savings that may result from the acquisitions of IMC and Care Holdings, any integration costs or tax deductibility of transaction costs. Additionally, Adjusted EBITDA presented on a pro forma basis gives effect to the acquisitions of IMC and Care Holdings as if they had occurred in historical periods. Such non-GAAP financial measures do not necessarily reflect what the Company’s Adjusted EBITDA would have been had the acquisitions occurred on the dates indicated. CAREMAX, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) (Unaudited) June 30, 2023 December 31, 2022 ASSETS Current Assets Cash and cash equivalents $ 54,605 $ 41,626 Accounts receivable, net 159,812 151,036 Risk settlement assets 717 707 Other current assets 3,516 3,968 Total Current Assets 218,650 197,336 Property and equipment, net 24,628 21,006 Operating lease right-of-use assets 131,207 108,937 Goodwill, net 602,643 700,643 Intangible assets, net 112,537 123,585 Deferred debt issuance costs 1,052 1,685 Other assets 60,249 17,550 Total Assets $ 1,150,965 $ 1,170,743 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable $ 8,677 $ 7,687 Accrued expenses 12,634 16,854 Risk settlement liabilities 15,656 14,171 Related party liabilities 13,410 1,777 Related party debt, net 32,997 30,277 Current portion of third-party debt, net 276 253 Current portion of operating lease liabilities 7,116 5,512 Other current liabilities 7,303 790 Total Current Liabilities 98,069 77,322 Derivative warrant liabilities 2,434 3,974 Long-term debt, net 298,481 230,725 Long-term operating lease liabilities 116,187 96,539 Contingent earnout liability - 134,561 Other liabilities 11,297 8,075 Total Liabilities 526,469 551,196 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS' EQUITY Preferred stock (1,000,000 shares authorized; one share issued and outstanding as of June 30, 2023 and December 31, 2022) - - Class A common stock ($0.0001 par value; 250,000,000 shares authorized; 112,072,237 and 111,332,584 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively) 11 11 Additional paid-in-capital 776,533 657,126 Accumulated deficit (152,048 ) (37,590 ) Total Stockholders' Equity 624,496 619,547 Total Liabilities and Stockholders' Equity $ 1,150,965 $ 1,170,743 CAREMAX, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share data) (Unaudited) Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Revenue Medicare risk-based revenue $ 155,486 $ 143,664 $ 277,079 $ 251,410 Medicaid risk-based revenue 30,054 19,896 55,680 40,062 Government value-based care revenue 22,206 - 32,216 - Other revenue 16,694 8,719 32,449 17,727 Total revenue 224,440 172,279 397,424 309,199 Operating expenses External provider costs 156,995 120,348 267,668 213,204 Cost of care 40,192 30,364 78,819 57,712 Sales and marketing 3,327 2,299 7,092 5,600 Corporate, general and administrative 20,795 18,063 44,739 37,041 Depreciation and amortization 6,828 4,903 13,404 9,965 Goodwill impairment - - 98,000 - Acquisition related costs 54 2,789 74 3,055 Total operating expenses 228,191 178,767 509,797 326,577 Operating loss (3,750 ) (6,488 ) (112,373 ) (17,378 ) Nonoperating income (expense) Interest expense (13,197 ) (3,896 ) (23,908 ) (5,624 ) Change in fair value of derivative warrant liabilities 434 7,391 1,540 3,855 Gain (loss) on remeasurement of contingent earnout liabilities (16,220 ) - 19,916 - Loss on extinguishment of debt, net - (6,172 ) - (6,172 ) Other income (expense), net 534 (45 ) 721 (507 ) (28,449 ) (2,722 ) (1,730 ) (8,448 ) Loss before income tax (32,199 ) (9,210 ) (114,103 ) (25,826 ) Income tax expense (177 ) (171 ) (355 ) (351 ) Net loss $ (32,376 ) $ (9,381 ) $ (114,458 ) $ (26,178 ) Weighted-average basic shares outstanding 111,671,302 87,422,917 111,511,214 87,395,596 Weighted-average diluted shares outstanding 111,671,302 87,422,917 111,511,214 87,395,596 Net loss per share Basic $ (0.29 ) $ (0.11 ) $ (1.03 ) $ (0.30 ) Diluted $ (0.29 ) $ (0.11 ) $ (1.03 ) $ (0.30 ) CAREMAX, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited) Six Months Ended June 30, 2023 2022 CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (114,458 ) $ (26,178 ) Adjustments to reconcile net loss to cash and cash equivalents Depreciation and amortization expense 13,404 9,965 Amortization of debt issuance costs and discounts 4,086 753 Stock-based compensation expense 4,762 3,875 Income tax provision 355 351 Change in fair value of derivative warrant liabilities (1,540 ) (3,855 ) Loss (gain) on remeasurement of contingent earnout liabilities (19,916 ) - Loss (gain) on extinguishment of debt - 6,172 Payment-in-kind interest expense 5,500 1,078 Provision for credit losses 57 - Goodwill impairment 98,000 - Amortization of right-of-use assets 5,842 - Other non-cash, net 1,213 60 Changes in operating assets and liabilities: Accounts receivable (1,255 ) (29,976 ) Other current assets 452 (504 ) Risk settlement assets and liabilities 1,968 19 Other assets (41,807 ) (105 ) Operating lease liabilities (4,959 ) - Accounts payable (128 ) 5,273 Accrued expenses (4,219 ) 4,910 Related party liabilities (1,134 ) - Other liabilities 10,515 764 Net cash used in operating activities (43,263 ) (27,398 ) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property and equipment (5,234 ) (2,893 ) Net cash used in investing activities (5,234 ) (2,893 ) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings on long-term debt, net 62,000 184,000 Principal payments of debt (125 ) (121,881 ) Payments of debt issuance costs (398 ) (6,174 ) Collateral for letters of credit - (5,439 ) Net cash provided by financing activities 61,477 50,505 NET INCREASE IN CASH AND CASH EQUIVALENTS 12,980 20,214 Cash and cash equivalents - beginning of period 41,626 47,917 CASH AND CASH EQUIVALENTS - END OF PERIOD $ 54,605 $ 68,130 Three Months Ended Non-GAAP Financial Summary* Pro Forma** (in thousands) Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Medicare risk-based revenue $ 66,618 $ 76,428 $ 91,277 $ 107,747 $ 143,664 $ 122,267 $ 113,041 $ 121,593 $ 155,486 Medicaid risk-based revenue 20,454 20,884 20,160 20,165 19,896 19,852 36,620 25,626 30,054 Government value-based care revenue - - - - - - - 10,010 22,206 Other revenue 4,839 7,308 6,869 9,008 8,719 15,551 14,602 15,754 16,694 Total revenue 91,911 104,620 118,306 136,920 172,279 157,670 164,263 172,983 224,440 External provider costs 70,466 73,329 79,724 92,856 120,348 106,900 104,078 110,673 156,995 Cost of care 13,246 20,315 22,606 26,854 30,293 30,150 34,581 37,627 38,865 Platform contribution 8,199 10,976 15,977 17,210 21,638 20,620 25,604 24,683 28,580 Platform contribution margin (%) 8.9 % 10.5 % 13.5 % 12.6 % 12.6 % 13.1 % 15.6 % 14.3 % 12.7 % Sales and marketing 1,688 1,274 2,615 3,301 2,299 2,355 3,806 3,765 3,381 Corporate, general and administrative 7,589 9,715 11,228 10,873 12,165 13,877 17,263 21,329 18,158 Adjusted operating expenses 9,277 10,988 13,843 14,174 14,464 16,232 21,069 25,094 21,539 Adjusted EBITDA n/a $ (13 ) $ 2,134 $ 3,035 $ 7,175 $ 4,388 $ 4,535 $ (411 ) $ 7,042 Pro Forma Adjusted EBITDA $ (1,078 ) n/a n/a n/a n/a n/a n/a n/a n/a * For period ended June 30, 2021, figures give effect to the Business Combinations of IMC and Care Holdings as if they had occurred on January 1, 2021. ** For period ended June 30, 2021, the measure was calculated in a manner consistent with the concepts of Article 8 of Regulation S-X and represents Pro Forma Platform Contribution. Reconciliation to Adjusted EBITDA and Pro Forma Adjusted EBITDA* Three Months Ended (in thousands) Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Net Income (loss) $ 10,057 $ (14,479 ) $ (3,553 ) $ (16,797 ) $ (9,381 ) $ (22,052 ) $ 10,434 $ (82,082 ) $ (32,376 ) Interest expense 792 1,291 1,905 1,728 3,896 6,076 8,542 10,711 13,197 Depreciation and amortization 1,437 5,176 6,089 5,062 4,903 4,573 7,180 6,576 6,828 Remeasurement of warrant and contingent earnout liabilities (19,215 ) 1,398 (8,734 ) 3,536 (7,391 ) 7,331 (84,171 ) (37,242 ) 15,786 Goodwill impairment - - - - - - 70,000 98,000 - Stock-based compensation - 966 375 1,087 2,788 3,611 2,786 2,298 2,464 Loss (gain) on extinguishment of debt, net (1,358 ) (279 ) 7 - 6,172 - - - - Business Combination integration costs (1) 3,278 3,176 2,277 4,379 1,887 2,586 163 716 686 Acquisition and integration related costs (2) 3,806 1,871 2,325 3,429 4,074 2,118 10,632 622 815 DeSpac costs 4,721 27 742 9 10 11 10 - - Other (3) (1,203 ) 840 543 421 46 (46 ) (967 ) (187 ) (535 ) Income tax provision (benefit) - - 159 181 171 181 (20,074 ) 177 177 Adjusted EBITDA n/a $ (13 ) $ 2,134 $ 3,035 $ 7,175 $ 4,388 $ 4,535 $ (411 ) $ 7,042 Pro forma adjustments (4) (3,393 ) - - - - - - - - Pro forma Adjusted EBITDA $ (1,078 ) n/a n/a n/a n/a n/a n/a n/a n/a * For period ended June 30, 2021, figures give effect to the Business Combinations of IMC and Care Holdings as if they had occurred on January 1, 2021. The Company has updated its calculation of Adjusted EBITDA on a retrospective basis to no longer add back certain compensation costs for stay-on bonuses and duplicative salaries previously included within the Business Combination integration costs adjustment. Memo: De novo pre-opening costs $ 19 $ 544 $ 806 $ 973 $ 506 $ 2,426 $ 3,205 $ 1,975 $ 1,560 De novo post-opening costs 364 195 489 1,119 993 1,533 2,274 3,885 4,228 (1) Represents initial costs to set up public company processes, incremental vendor expenses identified as temporary or duplicative and expected to be rationalized in the short term, and legal and professional expenses outside of the ordinary course of business, which are being incurred as part of the Company’s efforts as it integrates the two privately held companies that were combined in the Business Combination. Significant components of Business Combination integration costs were as follows: Three Months Ended (in thousands) Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Consulting and legal fees (a) $ 3,142 $ 2,204 $ 1,639 $ 3,190 $ 887 $ 725 $ 257 $ 282 $ 237 Severance costs - - 949 25 252 1,080 167 11 13 Other (b) 137 972 (311 ) 1,164 748 782 (261 ) 423 436 $ 3,278 $ 3,176 $ 2,277 $ 4,379 $ 1,887 $ 2,586 $ 163 $ 716 $ 686 (a) Represents consulting and legal costs directly associated with efforts related to integration of the two privately held companies that were combined in the Business Combination. (b) Represents primarily vendor expenses identified as temporary or duplicative and/or expenses outside the ordinary course of business and not necessary to run the Company's business. (2) Includes all costs recognized in acquisition related costs in our consolidated statements of operations and incremental payroll compensation expense for employees directly associated with services to achieve synergies related to closed transactions. Significant components of acquisition and integration related costs were as follows: Three Months Ended (in thousands) Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Advisor and other professinal fees (a) $ 3,257 $ 1,183 $ 1,183 $ 1,622 $ 2,359 $ 1,219 $ 9,877 $ (258 ) $ (34 ) Compensation costs (b) 549 688 1,142 1,808 1,715 899 755 880 849 $ 3,806 $ 1,871 $ 2,325 $ 3,429 $ 4,074 $ 2,118 $ 10,632 $ 622 $ 815 (a) Includes payments to our third-party transaction advisory firm associated with transaction contracts, including the Steward transaction that was closed in November 2022. Also, costs include legal and accounting fees directly associated with contemplated or closed transactions. (b) Includes incremental payroll compensation expense for employees directly associated with services to achieve synergies related to closed transactions. (3) Components of other were as follows: Three Months Ended (in thousands) Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Subrogation income $ (1,000 ) $ - $ - $ - $ - $ - $ - $ - $ - Software sale - - - - - - (1,000 ) - - Tax-related costs - 266 95 265 69 (178 ) 46 - - Legal settlement - 75 229 - (43 ) - - - - Interest income - - - - - - - (253 ) (602 ) Other (203 ) 499 219 156 19 133 (13 ) 66 67 $ (1,203 ) $ 840 $ 543 $ 421 $ 46 $ (46 ) $ (967 ) $ (187 ) $ (535 ) (4) Components of the pro forma adjustments were as follows: (in thousands) Three Months Ended June 30, 2021 IMC Adjusted EBITDA prior to the Business Combination(a) $ (3,460 ) Care Holdings Adjusted EBITDA prior to the Business Combination(a) 55 Other pro forma adjustments 12 Total pro forma adjustments $ (3,393 ) (a) The following table provides a reconciliation of net income (loss), the most closely comparable GAAP financial measure, to Adjusted EBITDA, for the results of IMC and Care Holdings prior to the Business Combination. Three Months Ended June 30, 2021 (in thousands) IMC Care Holdings Net income (loss) $ (6,151 ) $ 55 Depreciation and amortization 1,066 - Interest expense 1,625 - Adjusted EBITDA $ (3,460 ) $ 55 Pro Forma** Non-GAAP Operating Metrics Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Centers 34 40 45 48 48 51 62 62 62 Markets 2 3 4 6 6 7 7 7 7 Patients (MCREM)* 35,300 40,400 50,100 50,600 54,000 57,400 221,500 225,100 226,500 Patients in value-based care arrangements (MCREM) 84.1 % 87.2 % 79.3 % 79.8 % 81.0 % 78.2 % 97.6 % 99.0 % 99.4 % Platform Contribution ($, millions)** $ 8.2 $ 11.0 $ 16.0 $ 17.2 $ 21.6 $ 20.6 $ 25.6 $ 24.7 $ 28.6 * MCREM defined as Medicare Equivalent Members, which assumes the level of support received by a Medicare patient is equivalent to that received by three Medicaid or Commercial patients. ** For period ended June 30, 2021, the measure was calculated in a manner consistent with the concepts of Article 8 of Regulation S-X and represents Pro Forma Platform Contribution. Reconciliation to Platform Contribution and Pro forma Platform Contribution (in millions) Jun 30, 2021 Sep 30, 2021 Dec 31, 2021 Mar 31, 2022 Jun 30, 2022 Sep 30, 2022 Dec 31, 2022 Mar 31, 2023 Jun 30, 2023 Gross profit (a) $ 0.1 $ 4.5 $ 9.6 $ 11.2 $ 15.4 $ 14.8 $ 17.2 $ 17.1 $ 20.4 Depreciation and amortization 1.4 5.2 6.1 5.1 4.9 4.6 7.2 6.6 6.8 Stock-based compensation - - 0.1 0.4 1.3 1.2 1.2 1.0 1.3 Pro forma adjustments (b) 6.7 - - - - - - - - Other adjustments (c) - 1.3 0.2 0.5 0.1 0.1 - - - Pro forma Platform Contribution $ 8.2 n/a n/a n/a n/a n/a n/a n/a n/a Platform Contribution n/a $ 11.0 $ 16.0 17.2 $ 21.6 $ 20.6 $ 25.6 $ 24.7 $ 28.6 (a) Gross profit reflects the reclassification of stock-based compensation expense previously included in corporate, general and administrative expenses, which decreased gross profit by $0.1 million during the three months ended December 31, 2021, $0.4 million during the three months ended March 31, 2022, $1.3 million during the three months ended June 30, 2022, $1.2 million during the three months ended September 30, 2022, and $1.2 million during the three months ended December 31, 2022. (b) Pro Forma adjustments are computed in a manner consistent with the concepts of Article 8 of Regulation S-X and give effect to the Business Combinations of IMC and Care Holdings as if they had occurred on January 1, 2021. Components of the pro forma adjustments were as follows: Three Months Ended June 30, 2021 (in thousands) IMC Care Holdings Total Gross profit prior to Business Combination $ 4,682 $ 932 $ 5,614 Depreciation and amortization prior to Business Combination 1,066 1 1,067 Pro forma adjustment $ 5,748 $ 933 $ 6,681 (c) Other adjustments include incremental costs primarily related to post-Business Combination integration initiatives. Other adjustments reflected during the three months ended September 30, 2021 include $0.6 million of incremental costs relating to one-time operational projects and $0.3 million of non-cash true-up of deferred rent expense. Other adjustments reflected during the three months ended March 31, 2022 include $0.3 million of costs for a pilot project regarding outsourcing. Calculation of the Medical Expense Ratio Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 External provider costs $ 156,995 $ 120,348 $ 267,668 $ 213,204 Medicare and Medicaid risk-based revenue 185,540 163,560 332,759 291,472 Medical Expense Ratio 84.6 % 73.6 % 80.4 % 73.1 % View source version on businesswire.com: https://www.businesswire.com/news/home/20230809611138/en/
Investor Relations Samantha Swerdlin VP, Investor Relations ir@caremax.com Media Jaime Ameglio Marketing & Communications Director media@caremax.com