CareMax Reports Second Quarter 2024 Results
CareMax (NASDAQ: CMAX) reported its Q2 2024 results, showing mixed performance. The company's Medicare Advantage membership grew 1% year-over-year to 104,000, while total membership decreased 13% to 236,500. Total revenue fell 12% to $198.6 million. The company reported a net loss of $170.6 million, which included a $133.0 million non-cash impairment of long-lived assets. Adjusted EBITDA was ($11.2) million, down from $7.0 million in Q2 2023. The Medical Expense Ratio increased to 86.2% from 84.6% year-over-year. CareMax secured additional capital from lenders and extended the waiver of certain financial covenants as it continues to evaluate strategic alternatives.
CareMax (NASDAQ: CMAX) ha riportato i risultati del secondo trimestre del 2024, mostrando una performance mista. L'iscrizione al programma Medicare Advantage è aumentata dell'1% rispetto all'anno precedente, raggiungendo 104.000 membri, mentre l'iscrizione totale è diminuita del 13%, attestandosi a 236.500. I ricavi totali sono diminuiti del 12%, arrivando a 198,6 milioni di dollari. L'azienda ha registrato una perdita netta di 170,6 milioni di dollari, che includeva un impairamento non monetario degli attivi a lungo termine di 133,0 milioni di dollari. L'EBITDA rettificato è stato di (-11,2) milioni, in calo rispetto ai 7,0 milioni del secondo trimestre del 2023. Il rapporto spese mediche è aumentato all'86,2%, rispetto all'84,6% dell'anno precedente. CareMax ha acquisito capitale aggiuntivo da parte di i finanziatori e ha esteso la deroga di alcuni vincoli finanziari mentre continua a valutare alternative strategiche.
CareMax (NASDAQ: CMAX) reportó sus resultados del segundo trimestre de 2024, mostrando un rendimiento mixto. La membresía de Medicare Advantage creció un 1% en comparación con el año anterior alcanzando 104,000 miembros, mientras que la membresía total disminuyó un 13% a 236,500. Los ingresos totales cayeron un 12% a 198.6 millones de dólares. La compañía reportó una pérdida neta de 170.6 millones de dólares, que incluyó una impairización no monetaria de activos de larga duración de 133.0 millones de dólares. El EBITDA ajustado fue de (-11.2) millones, en comparación con 7.0 millones en el segundo trimestre de 2023. El índice de gastos médicos aumentó al 86.2% desde el 84.6% del año anterior. CareMax aseguró capital adicional de prestamistas y extendió la exención de ciertos convenios financieros mientras continúa evaluando alternativas estratégicas.
CareMax (NASDAQ: CMAX)는 2024년 2분기 실적을 발표하며 혼합 성과를 보였습니다. 메디케어 어드밴티지 가입자는 전년 대비 1% 증가하여 104,000명에 이른 반면, 총 가입자는 13% 감소하여 236,500명에 달했습니다. 총 수익은 12% 감소하여 1억 9860만 달러에 이르렀습니다. 회사는 1억 7060만 달러의 순손실을 기록했으며, 여기에는 1억 3300만 달러의 비현금 자산 손상이 포함되었습니다. 조정된 EBITDA는 (-1120만 달러)로, 2023년 2분기 700만 달러에서 감소했습니다. 의료비 비율은 전년 대비 84.6%에서 86.2%로 증가했습니다. CareMax는 대출자로부터 추가 자본을 확보하고 있으며, 전략적 대안 평가를 계속하며 특정 재무 계약의 면제를 연장했습니다.
CareMax (NASDAQ: CMAX) a annoncé ses résultats du deuxième trimestre 2024, montrant une performance mitigée. L'adhésion au programme Medicare Advantage a augmenté de 1 % d'une année sur l'autre, atteignant 104 000 membres, tandis que l'adhésion totale a diminué de 13 %, pour atteindre 236 500. Le chiffre d'affaires total a baissé de 12 %, s'élevant à 198,6 millions de dollars. L'entreprise a déclaré une perte nette de 170,6 millions de dollars, qui comprenait une dépréciation non monétaire des actifs à long terme de 133,0 millions de dollars. L'EBITDA ajusté était de (-11,2 millions de dollars), en baisse par rapport à 7,0 millions de dollars au deuxième trimestre 2023. Le ratio des dépenses médicales a augmenté à 86,2% contre 84,6 % d'une année sur l'autre. CareMax a obtenu un capital supplémentaire de créanciers et a prolongé l'exemption de certaines conditions financières tout en continuant à évaluer les alternatives stratégiques.
CareMax (NASDAQ: CMAX) hat seine Ergebnisse für das zweite Quartal 2024 veröffentlicht und zeigt eine gemischte Leistung. Die Mitgliedschaft im Medicare Advantage Programm wuchs im Jahresvergleich um 1% auf 104.000, während die Gesamtmitgliedschaft um 13% auf 236.500 zurückging. Der Gesamtumsatz fiel um 12% auf 198,6 Millionen US-Dollar. Das Unternehmen berichtete von einem Nettoverlust von 170,6 Millionen US-Dollar, der eine nicht zahlungswirksame Wertminderung langfristiger Vermögenswerte in Höhe von 133,0 Millionen US-Dollar beinhaltete. Das bereinigte EBITDA betrug (-11,2 Millionen US-Dollar) und sank von 7,0 Millionen US-Dollar im zweiten Quartal 2023. Das Verhältnis der medizinischen Ausgaben stieg im Jahresvergleich von 84,6% auf 86,2%. CareMax sicherte zusätzliches Kapital von Gläubigern und verlängerte die Aussetzung bestimmter finanzieller Vereinbarungen, während das Unternehmen weiterhin strategische Alternativen prüft.
- Medicare Advantage membership grew 1% year-over-year to 104,000
- Secured additional capital from lenders
- Extended waiver of certain financial covenants
- Total revenue decreased 12% year-over-year to $198.6 million
- Net loss of $170.6 million, including $133.0 million non-cash impairment of long-lived assets
- Adjusted EBITDA declined to ($11.2) million from $7.0 million in Q2 2023
- Medical Expense Ratio increased to 86.2% from 84.6% year-over-year
- Total membership decreased 13% year-over-year to 236,500
- Platform Contribution fell to $3.7 million from $28.6 million in Q2 2023
Insights
CareMax's Q2 2024 results reveal significant challenges. Total revenue decreased by
The
CareMax's Q2 results highlight the ongoing challenges in the value-based care sector. While Medicare Advantage membership grew slightly by
The mention of "evaluating strategic alternatives" suggests potential major changes ahead, such as a sale or restructuring. The de novo pre-opening costs and post-opening losses of
CareMax's Q2 performance reflects broader challenges in the value-based care market. The company's revenue decline and widening losses, despite a slight increase in Medicare Advantage membership, suggest difficulties in monetizing its patient base effectively. The high MER of
The need for additional capital and covenant waivers points to liquidity concerns, which could impact CareMax's ability to invest in growth initiatives. The market will likely view these results negatively, especially given the significant asset impairment. Investors may question the company's long-term viability and growth prospects in the competitive healthcare delivery landscape. CareMax's ability to execute its turnaround strategy and improve financial metrics will be important for its market positioning going forward.
-
Second Quarter Medicare Advantage Membership of 104,000, up
1% year-over-year -
Second Quarter Total Revenue of
$198.6 million 12% year-over-year
“Although our medical expense ratio continued to run higher than target levels, we were able to manage toward another quarter of sequential improvement in MER in the second quarter, and we continued to make progress against our clinical initiatives,” said Carlos de Solo, Chief Executive Officer.
Mr. de Solo continued, “Additionally, in July, we entered an agreement to access additional capital from our lenders and further extend the limited waiver of certain financial covenants in our credit facility. This funding will assist in bridging our liquidity as we continue to evaluate strategic alternatives for our business.”
Second Quarter 2024 Results
-
Total membership of 236,500, down
13% year-over-year. -
Medicare Advantage membership of 104,000, up
1% year-over-year. -
Total revenue was
$198.6 million 12% year-over-year. -
Net loss was
$170.6 million $2.4 million $133.0 million $32.4 million $16.2 million -
Adjusted EBITDA was
( , compared to adjusted EBITDA of$11.2) million $7.0 million -
Platform Contribution was
$3.7 million $28.6 million -
Medical Expense Ratio was
86.2% , compared to84.6% for the second quarter of 2023. -
De novo pre-opening costs and post-opening losses for the second quarter of 2024 were
$4.6 million
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. |
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, which consist of revenue, external provider costs and cost of care allocated to the de novo center. |
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 approximately 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 strategy, future transactions and future 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 net losses, level of indebtedness and significant cash used in operating activities have raised substantial doubt regarding its ability to continue as a going concern; 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 successfully execute its strategy, which may include divesting certain assets or businesses; the Company’s ability to successfully implement cost-saving measures or achieve expected benefits under its plans to optimize performance of the MSO network and its centers; the possibility of the Company filing for a restructuring under Chapter 11 of the US Bankruptcy Code if the Company is unable to successfully implement its plans; the possibility that the Company’s rights under certain existing agreements could be impaired as a result of bankruptcy proceedings brought by Steward Health Care System; the impact of restrictions on the Company’s current and future operations contained in certain of its agreements; risks relating to lease termination, lease expense escalators, lease extensions, special charges and the Company’s inability to comply with provisions of its lease agreements; the Company’s ability to integrate acquired businesses and realize expected benefits of any such transactions; the Company’s ability to attract new patients; changes in market or industry conditions, regulatory environment, competitive conditions, and receptivity to the Company's services; 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 impact of COVID-19 or any variant thereof or any other pandemic or epidemic on the Company's business and results of operation; insolvency, credit problems or other financial difficulties that could confront the Company’s counterparties in strategic acquisitions, investments and other collaborations could expose the Company to significant financial risk and significantly impact the Company’s ability to expand its overall profitability; 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
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.
CAREMAX, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) (Unaudited) |
||||||||
|
|
June 30,
|
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|
December 31,
|
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||
ASSETS |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Current Assets |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
16,430 |
|
|
$ |
65,528 |
|
Accounts receivable, net |
|
|
97,488 |
|
|
|
114,754 |
|
Other current assets |
|
|
9,547 |
|
|
|
3,066 |
|
Total Current Assets |
|
|
123,466 |
|
|
|
183,348 |
|
|
|
|
|
|
|
|
||
Property and equipment, net |
|
|
21,419 |
|
|
|
47,918 |
|
Operating lease right-of-use assets |
|
|
48,424 |
|
|
|
109,215 |
|
Goodwill, net |
|
|
156,841 |
|
|
|
156,841 |
|
Intangible assets, net |
|
|
42,163 |
|
|
|
101,243 |
|
Other assets |
|
|
61,730 |
|
|
|
24,737 |
|
Total Assets |
|
$ |
454,043 |
|
|
$ |
623,301 |
|
|
|
|
|
|
|
|
||
LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY |
|
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||
|
|
|
|
|
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||
Current Liabilities |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
8,453 |
|
|
$ |
6,275 |
|
Accrued expenses |
|
|
13,257 |
|
|
|
16,224 |
|
Risk settlement liabilities |
|
|
59,204 |
|
|
|
42,602 |
|
Related party liabilities |
|
|
1,772 |
|
|
|
190 |
|
Current portion of third-party debt, net |
|
|
403,321 |
|
|
|
364,380 |
|
Current portion of operating lease liabilities |
|
|
43,646 |
|
|
|
8,975 |
|
Other current liabilities |
|
|
17 |
|
|
|
165 |
|
Total Current Liabilities |
|
|
529,671 |
|
|
|
438,812 |
|
Derivative liabilities |
|
|
48 |
|
|
|
22 |
|
Long-term debt, net |
|
|
1,785 |
|
|
|
21,443 |
|
Long-term operating lease liabilities |
|
|
64,455 |
|
|
|
97,136 |
|
Other liabilities |
|
|
5,844 |
|
|
|
4,443 |
|
Total Liabilities |
|
|
601,803 |
|
|
|
561,856 |
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
||
STOCKHOLDERS’ (DEFICIT) EQUITY |
|
|
|
|
|
|
||
Preferred stock (1,000,000 shares authorized; one share issued and outstanding as of June 30, 2024 and December 31, 2023) |
|
|
— |
|
|
|
— |
|
Class A common stock ( |
|
|
11 |
|
|
|
11 |
|
Additional paid-in-capital |
|
|
787,132 |
|
|
|
782,371 |
|
Accumulated deficit |
|
|
(934,902 |
) |
|
|
(720,938 |
) |
Total Stockholders’ (Deficit) Equity |
|
|
(147,759 |
) |
|
|
61,444 |
|
|
|
|
|
|
|
|
||
Total Liabilities and Stockholders’ (Deficit) Equity |
|
$ |
454,043 |
|
|
$ |
623,301 |
|
|
|
|
|
|
|
|
||
CAREMAX, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share data) (Unaudited) |
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|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
Revenue |
|
|
|
|
|
|
|
|
|
|
|
||||
Medicare risk-based revenue |
$ |
154,857 |
|
|
$ |
155,486 |
|
|
$ |
323,359 |
|
|
$ |
277,079 |
|
Medicaid risk-based revenue |
|
22,865 |
|
|
|
30,054 |
|
|
|
60,518 |
|
|
|
55,680 |
|
Government value-based care revenue |
|
14,690 |
|
|
|
22,206 |
|
|
|
33,505 |
|
|
|
32,216 |
|
Other revenue |
|
6,215 |
|
|
|
16,694 |
|
|
|
13,491 |
|
|
|
32,449 |
|
Total revenue |
|
198,627 |
|
|
|
224,440 |
|
|
|
430,872 |
|
|
|
397,424 |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
||||
External provider costs |
|
153,115 |
|
|
|
156,995 |
|
|
|
334,056 |
|
|
|
267,668 |
|
Cost of care |
|
42,593 |
|
|
|
40,192 |
|
|
|
85,726 |
|
|
|
78,819 |
|
Sales and marketing |
|
1,378 |
|
|
|
3,327 |
|
|
|
4,441 |
|
|
|
7,092 |
|
Corporate, general and administrative |
|
14,780 |
|
|
|
20,849 |
|
|
|
34,888 |
|
|
|
44,813 |
|
Depreciation and amortization |
|
6,512 |
|
|
|
6,828 |
|
|
|
13,218 |
|
|
|
13,404 |
|
Impairment of long-lived assets |
|
132,990 |
|
|
|
— |
|
|
|
132,990 |
|
|
|
— |
|
Goodwill impairment |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
98,000 |
|
Total operating expenses |
|
351,368 |
|
|
|
228,191 |
|
|
|
605,318 |
|
|
|
509,797 |
|
Operating loss |
|
(152,741 |
) |
|
|
(3,750 |
) |
|
|
(174,446 |
) |
|
|
(112,373 |
) |
Nonoperating (expenses) income |
|
|
|
|
|
|
|
|
|
|
|
||||
Interest expense |
|
(20,376 |
) |
|
|
(13,197 |
) |
|
|
(40,131 |
) |
|
|
(23,908 |
) |
Change in fair value of derivative liabilities |
|
2,355 |
|
|
|
434 |
|
|
|
(26 |
) |
|
|
1,540 |
|
(Loss) gain on remeasurement of contingent earnout liabilities |
|
— |
|
|
|
(16,220 |
) |
|
|
— |
|
|
|
19,916 |
|
Other income, net |
|
382 |
|
|
|
534 |
|
|
|
992 |
|
|
|
721 |
|
Total nonoperating expenses |
|
(17,639 |
) |
|
|
(28,449 |
) |
|
|
(39,165 |
) |
|
|
(1,730 |
) |
Loss before income tax |
|
(170,381 |
) |
|
|
(32,199 |
) |
|
|
(213,612 |
) |
|
|
(114,103 |
) |
Income tax expense |
|
(177 |
) |
|
|
(177 |
) |
|
|
(354 |
) |
|
|
(355 |
) |
Net loss |
$ |
(170,558 |
) |
|
$ |
(32,376 |
) |
|
$ |
(213,966 |
) |
|
$ |
(114,458 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Weighted-average basic shares outstanding1 |
|
3,807,551 |
|
|
|
3,722,377 |
|
|
|
3,793,076 |
|
|
|
3,717,040 |
|
Weighted-average diluted shares outstanding1 |
|
3,807,551 |
|
|
|
3,722,377 |
|
|
|
3,793,076 |
|
|
|
3,717,040 |
|
Net loss per share |
|
|
|
|
|
|
|
|
|
|
|
||||
Basic |
$ |
(44.79 |
) |
|
$ |
(8.70 |
) |
|
$ |
(56.41 |
) |
|
$ |
(30.79 |
) |
Diluted |
$ |
(44.79 |
) |
|
$ |
(8.70 |
) |
|
$ |
(56.41 |
) |
|
$ |
(30.79 |
) |
|
|
|
|
|
|
|
|
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|
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1 Share amounts have been restated to reflect the 1-for-30 reverse stock split that the Company completed on January 31, 2024. |
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CAREMAX, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited) |
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|
|
Six Months Ended June 30, |
|
|||||
|
|
2024 |
|
|
2023 |
|
||
CASH FLOWS FROM OPERATING ACTIVITIES |
|
|
|
|
|
|
||
Net loss |
|
$ |
(213,966 |
) |
|
$ |
(114,458 |
) |
Adjustments to reconcile net loss to cash and cash equivalents: |
|
|
|
|
|
|
||
Depreciation and amortization expense |
|
|
13,218 |
|
|
|
13,404 |
|
Amortization of debt issuance costs and discounts |
|
|
1,821 |
|
|
|
4,086 |
|
Impairment of long-lived assets |
|
|
132,990 |
|
|
|
— |
|
Stock-based compensation expense |
|
|
4,761 |
|
|
|
4,762 |
|
Deferred income taxes |
|
|
354 |
|
|
|
355 |
|
Change in fair value of derivative liabilities |
|
|
26 |
|
|
|
(1,540 |
) |
Gain on remeasurement of contingent earnout liabilities |
|
|
— |
|
|
|
(19,916 |
) |
Payment-in-kind interest expense |
|
|
21,955 |
|
|
|
5,500 |
|
Non-cash finance lease expense |
|
|
293 |
|
|
|
— |
|
Provision for credit losses |
|
|
(307 |
) |
|
|
57 |
|
Goodwill impairment |
|
|
— |
|
|
|
98,000 |
|
Amortization of right-of-use assets |
|
|
5,325 |
|
|
|
5,842 |
|
Other non-cash, net |
|
|
33 |
|
|
|
1,213 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
17,573 |
|
|
|
(1,255 |
) |
Other current assets |
|
|
(6,481 |
) |
|
|
452 |
|
Risk settlement liabilities |
|
|
16,602 |
|
|
|
1,968 |
|
Other assets |
|
|
(41,749 |
) |
|
|
(41,807 |
) |
Operating lease liabilities |
|
|
(1,577 |
) |
|
|
(4,959 |
) |
Accounts payable |
|
|
1,502 |
|
|
|
(128 |
) |
Accrued expenses |
|
|
(2,967 |
) |
|
|
(4,219 |
) |
Related party liabilities |
|
|
1,582 |
|
|
|
(1,134 |
) |
Other liabilities |
|
|
898 |
|
|
|
10,515 |
|
Net cash used in operating activities |
|
|
(48,114 |
) |
|
|
(43,263 |
) |
|
|
|
|
|
|
|
||
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
|
||
Purchases of property and equipment |
|
|
(794 |
) |
|
|
(5,234 |
) |
Net cash used in investing activities |
|
|
(794 |
) |
|
|
(5,234 |
) |
|
|
|
|
|
|
|
||
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
||
Proceeds from borrowings, net |
|
|
— |
|
|
|
62,000 |
|
Principal payments of debt |
|
|
(189 |
) |
|
|
(125 |
) |
Payments of debt issuance costs |
|
|
— |
|
|
|
(398 |
) |
Net cash (used in) provided by financing activities |
|
|
(189 |
) |
|
|
61,477 |
|
|
|
|
|
|
|
|
||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS |
|
|
(49,097 |
) |
|
|
12,980 |
|
Cash and cash equivalents - beginning of period |
|
|
65,528 |
|
|
|
41,626 |
|
CASH AND CASH EQUIVALENTS - END OF PERIOD |
|
$ |
16,430 |
|
|
$ |
54,605 |
|
The following table represents Non-GAAP Financial Summary: |
|||||||||||||||||||||||||||
Non-GAAP Financial Summary |
|
||||||||||||||||||||||||||
(Unaudited) |
Three Months Ended |
|
|||||||||||||||||||||||||
(in thousands) |
Jun 30,
|
|
Sep 30,
|
|
Dec 31,
|
|
Mar 31,
|
|
Jun 30,
|
|
Sep 30,
|
|
Dec 31,
|
|
Mar 31,
|
|
Jun 30,
|
|
|||||||||
Medicare risk-based revenue |
$ |
143,664 |
|
$ |
122,267 |
|
$ |
113,041 |
|
$ |
121,593 |
|
$ |
155,486 |
|
$ |
134,105 |
|
$ |
108,650 |
|
$ |
168,502 |
|
$ |
154,857 |
|
Medicaid risk-based revenue |
|
19,896 |
|
|
19,852 |
|
|
36,620 |
|
|
25,626 |
|
|
30,054 |
|
|
23,950 |
|
|
26,263 |
|
|
37,653 |
|
|
22,865 |
|
Government value-based care revenue |
|
— |
|
|
— |
|
|
6,389 |
|
|
10,010 |
|
|
22,206 |
|
|
28,067 |
|
|
7,425 |
|
|
18,815 |
|
|
14,690 |
|
Other revenue |
|
8,719 |
|
|
15,551 |
|
|
8,213 |
|
|
15,754 |
|
|
16,694 |
|
|
15,721 |
|
|
9,497 |
|
|
7,276 |
|
|
6,215 |
|
Total revenue |
|
172,279 |
|
|
157,670 |
|
|
164,263 |
|
|
172,983 |
|
|
224,440 |
|
|
201,843 |
|
|
151,835 |
|
|
232,246 |
|
|
198,627 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
External provider costs |
|
120,348 |
|
|
106,900 |
|
|
104,078 |
|
|
110,673 |
|
|
156,995 |
|
|
139,139 |
|
|
165,522 |
|
|
180,941 |
|
|
153,115 |
|
Cost of care |
|
30,293 |
|
|
30,150 |
|
|
34,581 |
|
|
37,627 |
|
|
38,865 |
|
|
41,599 |
|
|
41,915 |
|
|
42,229 |
|
|
41,808 |
|
Platform contribution |
|
21,638 |
|
|
20,620 |
|
|
25,604 |
|
|
24,683 |
|
|
28,580 |
|
|
21,106 |
|
|
(55,602 |
) |
|
9,075 |
|
|
3,704 |
|
Platform contribution margin (%) |
|
12.6 |
% |
|
13.1 |
% |
|
15.6 |
% |
|
14.3 |
% |
|
12.7 |
% |
|
10.5 |
% |
|
(36.6 |
%) |
|
3.9 |
% |
|
1.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Sales and marketing |
|
2,299 |
|
|
2,355 |
|
|
3,806 |
|
|
3,765 |
|
|
3,381 |
|
|
3,501 |
|
|
3,627 |
|
|
3,064 |
|
|
1,378 |
|
Corporate, general and administrative |
|
12,165 |
|
|
13,877 |
|
|
17,263 |
|
|
21,329 |
|
|
18,158 |
|
|
15,527 |
|
|
12,531 |
|
|
16,495 |
|
|
13,480 |
|
Adjusted operating expenses |
|
14,464 |
|
|
16,232 |
|
|
21,069 |
|
|
25,094 |
|
|
21,539 |
|
|
19,028 |
|
|
16,158 |
|
|
19,559 |
|
|
14,858 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Adjusted EBITDA |
$ |
7,175 |
|
$ |
4,388 |
|
$ |
4,535 |
|
$ |
(411 |
) |
$ |
7,042 |
|
$ |
2,077 |
|
$ |
(71,759 |
) |
$ |
(10,482 |
) |
$ |
(11,152 |
) |
The following table provides a reconciliation of GAAP net (loss) income to Adjusted EBITDA: |
|||||||||||||||||||||||||||
Reconciliation to Adjusted EBITDA |
|
|
|||||||||||||||||||||||||
(Unaudited) |
Three Months Ended |
|
|||||||||||||||||||||||||
(in thousands) |
Jun 30,
|
|
Sep 30,
|
|
Dec 31,
|
|
Mar 31,
|
|
Jun 30,
|
|
Sep 30,
|
|
Dec 31,
|
|
Mar 31,
|
|
Jun 30,
|
|
|||||||||
Net (loss) income |
$ |
(9,381 |
) |
$ |
(22,053 |
) |
$ |
10,434 |
|
$ |
(82,082 |
) |
$ |
(32,376 |
) |
$ |
(103,123 |
) |
$ |
(465,766 |
) |
$ |
(43,408 |
) |
$ |
(170,558 |
) |
Interest expense |
|
3,896 |
|
|
6,088 |
|
|
8,743 |
|
|
10,711 |
|
|
13,197 |
|
|
14,000 |
|
|
16,526 |
|
|
19,756 |
|
|
20,376 |
|
Depreciation and amortization |
|
4,903 |
|
|
4,573 |
|
|
7,180 |
|
|
6,576 |
|
|
6,828 |
|
|
6,833 |
|
|
7,550 |
|
|
6,705 |
|
|
6,512 |
|
Impairment of long-lived assets |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
132,990 |
|
Remeasurement of derivative and contingent earnout liabilities |
|
(7,391 |
) |
|
7,331 |
|
|
(84,171 |
) |
|
(37,242 |
) |
|
15,786 |
|
|
(1,450 |
) |
|
(961 |
) |
|
2,381 |
|
|
(2,355 |
) |
Goodwill impairment |
|
— |
|
|
— |
|
|
70,000 |
|
|
98,000 |
|
|
— |
|
|
80,000 |
|
|
369,200 |
|
|
— |
|
|
— |
|
Stock-based compensation |
|
2,788 |
|
|
3,611 |
|
|
2,786 |
|
|
2,298 |
|
|
2,464 |
|
|
3,243 |
|
|
2,595 |
|
|
2,365 |
|
|
2,396 |
|
Loss on extinguishment of debt |
|
6,172 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Business Combination integration costs(1) |
|
1,887 |
|
|
2,586 |
|
|
163 |
|
|
716 |
|
|
686 |
|
|
483 |
|
|
833 |
|
|
381 |
|
|
399 |
|
Acquisition and disposition related costs(2) |
|
4,074 |
|
|
2,118 |
|
|
10,632 |
|
|
622 |
|
|
815 |
|
|
652 |
|
|
1,069 |
|
|
1,052 |
|
|
(669 |
) |
Other(3) |
|
56 |
|
|
(47 |
) |
|
(1,158 |
) |
|
(187 |
) |
|
(535 |
) |
|
1,263 |
|
|
(1,409 |
) |
|
109 |
|
|
(421 |
) |
Income tax expense (benefit) |
|
171 |
|
|
181 |
|
|
(20,074 |
) |
|
177 |
|
|
177 |
|
|
177 |
|
|
(1,395 |
) |
|
177 |
|
|
177 |
|
Adjusted EBITDA |
$ |
7,175 |
|
$ |
4,388 |
|
$ |
4,535 |
|
$ |
(411 |
) |
$ |
7,042 |
|
$ |
2,077 |
|
$ |
(71,759 |
) |
$ |
(10,482 |
) |
$ |
(11,152 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Memo: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
De novo pre-opening costs |
$ |
506 |
|
$ |
2,426 |
|
$ |
3,205 |
|
$ |
1,975 |
|
$ |
1,560 |
|
$ |
1,880 |
|
$ |
1,323 |
|
$ |
1,366 |
|
$ |
1,775 |
|
De novo post-opening losses |
993 |
|
|
1,533 |
|
|
2,274 |
|
|
3,885 |
|
|
4,228 |
|
|
3,906 |
|
|
4,558 |
|
|
3,451 |
|
|
2,789 |
|
|
| (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: |
(Unaudited) |
Three Months Ended |
|
|||||||||||||||||||||||||
(in thousands) |
Jun 30,
|
|
Sep 30,
|
|
Dec 31,
|
|
Mar 31,
|
|
Jun 30,
|
|
Sep 30,
|
|
Dec 31,
|
|
Mar 31,
|
|
Jun 30,
|
|
|||||||||
Consulting and legal fees (a) |
$ |
887 |
|
$ |
725 |
|
$ |
257 |
|
$ |
282 |
|
$ |
237 |
|
$ |
69 |
|
$ |
451 |
|
$ |
371 |
|
$ |
389 |
|
Severance costs |
|
252 |
|
|
1,080 |
|
|
167 |
|
|
11 |
|
|
13 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Other (b) |
|
748 |
|
|
782 |
|
|
(261 |
) |
|
423 |
|
|
436 |
|
|
414 |
|
|
382 |
|
|
10 |
|
|
10 |
|
|
$ |
1,887 |
|
$ |
2,586 |
|
$ |
163 |
|
$ |
716 |
|
$ |
686 |
|
$ |
483 |
|
$ |
833 |
|
$ |
381 |
|
$ |
399 |
|
(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) | Represents legal and incremental compensation payroll costs directly associated with efforts to achieve synergies related to closed transactions and legal and advisory costs related to exploration of potential dispositions. Significant components of the acquisition and disposition related costs were as follows: |
| (Unaudited) | Three Months Ended |
|
|||||||||||||||||||||||||
(in thousands) |
Jun 30,
|
|
Sep 30,
|
|
Dec 31,
|
|
Mar 31,
|
|
Jun 30,
|
|
Sep 30,
|
|
Dec 31,
|
|
Mar 31,
|
|
Jun 30,
|
|
|||||||||
Advisor and other professional fees (a) |
$ |
2,359 |
|
$ |
1,219 |
|
$ |
9,877 |
|
$ |
(258 |
) |
$ |
(34 |
) |
$ |
94 |
|
$ |
352 |
|
$ |
524 |
|
$ |
(967 |
) |
Compensation costs (b) |
|
1,715 |
|
|
899 |
|
|
755 |
|
|
880 |
|
|
849 |
|
|
558 |
|
|
717 |
|
|
528 |
|
|
444 |
|
|
$ |
4,074 |
|
$ |
2,118 |
|
$ |
10,632 |
|
$ |
622 |
|
$ |
815 |
|
$ |
652 |
|
$ |
1,069 |
|
$ |
1,052 |
|
$ |
(524 |
) |
(a) Includes payments to our third-party transaction advisory firm associated with transaction contracts, including the Steward transaction that closed in November 2022. Also, costs include legal and accounting fees directly associated with contemplated or closed transactions or potential dispositions. |
||
(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: |
| (Unaudited) | Three Months Ended |
|
|||||||||||||||||||||||||
(in thousands) |
Jun 30,
|
|
Sep 30,
|
|
Dec 31,
|
|
Mar 31,
|
|
Jun 30,
|
|
Sep 30,
|
|
Dec 31,
|
|
Mar 31,
|
|
Jun 30,
|
|
|||||||||
Other income |
$ |
— |
|
$ |
— |
|
$ |
(1,000 |
) |
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
(874 |
) |
$ |
— |
|
$ |
— |
|
Tax-related costs |
|
69 |
|
|
(178 |
) |
|
46 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Interest income |
|
— |
|
|
(12 |
) |
|
(201 |
) |
|
(253 |
) |
|
(602 |
) |
|
(433 |
) |
|
(560 |
) |
|
(668 |
) |
|
(277 |
) |
Severance costs |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,639 |
|
|
— |
|
|
694 |
|
|
— |
|
Other |
|
(14 |
) |
|
144 |
|
|
(3 |
) |
|
66 |
|
|
67 |
|
|
58 |
|
|
25 |
|
|
83 |
|
|
(144 |
) |
|
$ |
56 |
|
$ |
(47 |
) |
$ |
(1,158 |
) |
$ |
(187 |
) |
$ |
(535 |
) |
$ |
1,263 |
|
$ |
(1,409 |
) |
$ |
109 |
|
$ |
(421 |
) |
The following metrics are as of the end of the indicated date, except for Platform Contribution, which is for the three month period ended as of the indicated date: |
|||||||||||||||||||||||||||
(Unaudited) |
Three Months Ended |
|
|||||||||||||||||||||||||
Non-GAAP Operating Metrics |
Jun 30,
|
|
Sep 30,
|
|
Dec 31,
|
|
Mar 31,
|
|
Jun 30,
|
|
Sep 30,
|
|
Dec 31,
|
|
Mar 31,
|
|
Jun 30,
|
|
|||||||||
Centers |
|
48 |
|
|
51 |
|
|
62 |
|
|
62 |
|
|
62 |
|
|
62 |
|
|
56 |
|
|
55 |
|
|
50 |
|
Markets |
|
6 |
|
|
7 |
|
|
7 |
|
|
7 |
|
|
7 |
|
|
7 |
|
|
7 |
|
|
6 |
|
|
6 |
|
Patients (MCREM)* |
|
54,000 |
|
|
57,400 |
|
|
221,500 |
|
|
225,100 |
|
|
226,500 |
|
|
228,700 |
|
|
229,300 |
|
|
218,000 |
|
|
210,900 |
|
Patients in value-based care arrangements (MCREM) |
|
81.0 |
% |
|
78.2 |
% |
|
97.6 |
% |
|
99.0 |
% |
|
99.4 |
% |
|
98.8 |
% |
|
98.8 |
% |
|
99.1 |
% |
|
99.4 |
% |
Platform Contribution ($, millions) |
$ |
21.6 |
|
$ |
20.6 |
|
$ |
25.6 |
|
$ |
24.7 |
|
$ |
28.6 |
|
$ |
21.1 |
|
$ |
(55.6 |
) |
$ |
9.1 |
|
$ |
3.7 |
|
* 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. |
|
||||||||||||||||||||||||||
|
|
|
|
||||||||||||||||||||||||
The following table provides a reconciliation of gross profit, the most closely comparable GAAP financial measure, to Platform Contribution: |
|||||||||||||||||||||||||||
Reconciliation to Platform Contribution |
|
|
|||||||||||||||||||||||||
(Unaudited) |
Three Months Ended |
|
|||||||||||||||||||||||||
(in millions) |
Jun 30,
|
|
Sep 30,
|
|
Dec 31,
|
|
Mar 31,
|
|
Jun 30,
|
|
Sep 30,
|
|
Dec 31,
|
|
Mar 31,
|
|
Jun 30,
|
|
|||||||||
Gross profit (a) |
$ |
15.4 |
|
$ |
14.8 |
|
$ |
17.2 |
|
$ |
17.1 |
|
$ |
20.4 |
|
$ |
12.0 |
|
$ |
(63.5 |
) |
$ |
1.5 |
|
$ |
(3.6 |
) |
Depreciation and amortization |
|
4.9 |
|
|
4.6 |
|
|
7.2 |
|
|
6.6 |
|
|
6.8 |
|
|
6.8 |
|
|
7.6 |
|
|
6.7 |
|
|
6.5 |
|
Stock-based compensation |
|
1.3 |
|
|
1.2 |
|
|
1.2 |
|
|
1.0 |
|
|
1.3 |
|
|
1.2 |
|
|
0.1 |
|
|
0.7 |
|
|
0.7 |
|
Other adjustments (b) |
|
0.1 |
|
|
0.1 |
|
|
— |
|
|
— |
|
|
— |
|
|
1.0 |
|
|
0.2 |
|
|
0.2 |
|
|
0.1 |
|
Platform Contribution |
$ |
21.6 |
|
$ |
20.6 |
|
$ |
25.6 |
|
$ |
24.7 |
|
$ |
28.6 |
|
$ |
21.1 |
|
$ |
(55.6 |
) |
$ |
9.1 |
|
$ |
3.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
(a) Gross profit reflects the reclassification of stock-based compensation expense previously included in corporate, general and administrative expenses, which decreased gross profit by |
|
||||||||||||||||||||||||||
(b) Other adjustments include incremental costs related to post-Business Combination integration initiatives and other one-time center-level costs. During the three months ended September 30, 2023, December 31, 2023, and March 31, 2024, other adjustments include |
|
||||||||||||||||||||||||||
The following table calculates the medical expense ratio: |
|||||||||||||||
(Unaudited) |
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
(in thousands, except ratio) |
2024 |
|
|
2023 |
|
|
2024 |
|
|
2023 |
|
||||
External provider costs |
$ |
153,115 |
|
|
$ |
156,995 |
|
|
$ |
334,056 |
|
|
$ |
267,668 |
|
Medicare and Medicaid risk-based revenue |
|
177,722 |
|
|
|
185,540 |
|
|
|
383,877 |
|
|
|
332,759 |
|
Medical Expense Ratio |
|
86.2 |
% |
|
|
84.6 |
% |
|
|
87.0 |
% |
|
|
80.4 |
% |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240809634842/en/
Investor Relations
Roger Ou
SVP of Finance and Investor Relations
CareMaxInvestorRelations@caremax.com
Source: CareMax, Inc.
FAQ
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