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CareMax Reports Second Quarter 2024 Results

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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.

Positive
  • Medicare Advantage membership grew 1% year-over-year to 104,000
  • Secured additional capital from lenders
  • Extended waiver of certain financial covenants
Negative
  • 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 12% year-over-year to $198.6 million, while the net loss widened to $170.6 million from $32.4 million in Q2 2023. The Medical Expense Ratio (MER) increased to 86.2%, indicating higher healthcare costs relative to premiums. The company's Adjusted EBITDA turned negative at ($11.2) million, compared to a positive $7.0 million last year, signaling operational challenges.

The $133.0 million non-cash impairment of long-lived assets is particularly concerning, suggesting a significant write-down of the company's assets. This, combined with the need for additional capital and covenant waivers, points to serious financial strain. Investors should closely monitor CareMax's ability to improve its MER and return to profitability in the coming quarters.

CareMax's Q2 results highlight the ongoing challenges in the value-based care sector. While Medicare Advantage membership grew slightly by 1%, the overall membership decline of 13% is worrisome. The company's struggle with a high MER of 86.2% indicates difficulties in managing healthcare costs effectively.

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 $4.6 million show continued expansion efforts, but these may be scaled back given the financial pressures. The sequential improvement in MER is a positive sign, but CareMax needs to demonstrate sustained progress in cost management and operational efficiency to regain investor confidence.

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 86.2% indicates potential issues with risk assessment or care management strategies.

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, down 12% year-over-year

MIAMI--(BUSINESS WIRE)-- 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, 2024.

“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, down 12% year-over-year.
  • Net loss was $170.6 million, which included a $2.4 million non-cash gain on remeasurement of derivative liabilities and $133.0 million of non-cash impairment of long-lived assets, compared to net loss of $32.4 million for the second quarter of 2023, which included a non-cash loss on remeasurement of contingent earnout liabilities of $16.2 million.
  • Adjusted EBITDA was ($11.2) million, compared to adjusted EBITDA of $7.0 million for the second quarter of 2023.1
  • Platform Contribution was $3.7 million, compared to $28.6 million for the second quarter of 2023.1
  • Medical Expense Ratio was 86.2%, compared to 84.6% 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.2

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 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.

CAREMAX, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

(Unaudited)

 

 

 

June 30,
2024

 

 

December 31,
2023

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

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 ($0.0001 par value; 8,333,333 shares authorized; 3,814,871 and 3,744,732 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively)

 

 

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)

 

 

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

)

 

 

 

 

 

 

 

 

 

 

 

 

1 Share amounts have been restated to reflect the 1-for-30 reverse stock split that the Company completed on January 31, 2024.

CAREMAX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

 

 

 

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,
2022

 

Sep 30,
2022

 

Dec 31,
2022

 

Mar 31,
2023

 

Jun 30,
2023

 

Sep 30,
2023

 

Dec 31,
2023

 

Mar 31,
2024

 

Jun 30,
2024

 

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,
2022

 

Sep 30,
2022

 

Dec 31,
2022

 

Mar 31,
2023

 

Jun 30,
2023

 

Sep 30,
2023

 

Dec 31,
2023

 

Mar 31,
2024

 

Jun 30,
2024

 

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,
2022

 

Sep 30,
2022

 

Dec 31,
2022

 

Mar 31,
2023

 

Jun 30,
2023

 

Sep 30,
2023

 

Dec 31,
2023

 

Mar 31,
2024

 

Jun 30,
2024

 

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,
2022

 

Sep 30,
2022

 

Dec 31,
2022

 

Mar 31,
2023

 

Jun 30,
2023

 

Sep 30,
2023

 

Dec 31,
2023

 

Mar 31,
2024

 

Jun 30,
2024

 

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,
2022

 

Sep 30,
2022

 

Dec 31,
2022

 

Mar 31,
2023

 

Jun 30,
2023

 

Sep 30,
2023

 

Dec 31,
2023

 

Mar 31,
2024

 

Jun 30,
2024

 

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,
2022

 

Sep 30,
2022

 

Dec 31,
2022

 

Mar 31,
2023

 

Jun 30,
2023

 

Sep 30,
2023

 

Dec 31,
2023

 

Mar 31,
2024

 

Jun 30,
2024

 

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,
2022

 

Sep 30,
2022

 

Dec 31,
2022

 

Mar 31,
2023

 

Jun 30,
2023

 

Sep 30,
2023

 

Dec 31,
2023

 

Mar 31,
2024

 

Jun 30,
2024

 

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 $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) 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 $1.0 million, $0.2 million and $0.2 million, respectively, of severance costs related to center staff.

 

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

%

 

Investor Relations

Roger Ou

SVP of Finance and Investor Relations

CareMaxInvestorRelations@caremax.com

Source: CareMax, Inc.

FAQ

What was CareMax's (CMAX) total revenue for Q2 2024?

CareMax's total revenue for Q2 2024 was $198.6 million, down 12% year-over-year.

How did CareMax's (CMAX) Medicare Advantage membership change in Q2 2024?

CareMax's Medicare Advantage membership grew 1% year-over-year to 104,000 in Q2 2024.

What was CareMax's (CMAX) net loss in Q2 2024?

CareMax reported a net loss of $170.6 million in Q2 2024, which included a $133.0 million non-cash impairment of long-lived assets.

How did CareMax's (CMAX) Medical Expense Ratio change in Q2 2024?

CareMax's Medical Expense Ratio increased to 86.2% in Q2 2024, compared to 84.6% for the second quarter of 2023.

CareMax, Inc.

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