- 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
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