CareMax, Inc. (NASDAQ: CMAX; CMAXW), a leading
technology-enabled provider of value-based care to seniors,
announced today financial results for the second quarter ended June
30, 2021.
Business Highlights
- Announced collaboration with Anthem described in separate press
release issued earlier today
- Entered into agreement with The Related Companies, a leading
national affordable housing developer, to support CareMax in
opening centers inside or near affordable senior housing
nationwide
- Anticipate opening at least 75 new CareMax centers over the
next three years
- Completed the acquisition of Senior Medical Associates (SMA)
and entered into a definitive agreement to acquire DNF Medical
Centers, expanding our penetration in Central Florida
- Scheduled Investor Day to discuss key growth strategies on
September 9, 2021 at 9:30am ET
Second Quarter 2021 Results1
- GAAP total revenue was $44.9 million for the second quarter of
2021 and $72.8 million for the first half of the year.
- GAAP net loss was $7.4 million for the second quarter of 2021,
or $0.26 per diluted share, and $6.0 million, or $0.31 per share,
for the first half of the year.
- On a pro forma basis, total revenue was $97.8 million for the
second quarter of 2021 and $193.2 million for the first half of the
year.
- Adjusted EBITDA2 was $1.5 million for the second quarter of
2021 and $10.2 million for the first half of 2021. Direct COVID
headwinds accounted for an approximately $11 million reduction in
adjusted EBITDA.
- The Company ended the quarter with approximately 61,500 total
members and 21,500 Medicare Advantage members, not including the
more than 4,000 members from the planned acquisition of DNF Medical
Centers.
- As of June 30, 2021, the Company operated 34 medical centers,
with two additional centers in progress and slated to open in 2022.
Six additional centers are anticipated to be added as part of the
planned acquisition of DNF Medical Centers.
1 GAAP presentation is for CareMax Medical
Group and includes the financial information and activities for IMC
for the period from June 8, 2021 (the closing of the business
combination) to (and including) June 30, 2021 (23 days). Pro forma
and other non-GAAP information gives effect to the business
combination and the acquisition of SMA as if the transactions had
occurred in historical periods.
2 Adjusted EBITDA and pro forma medical
expense ratio are non-GAAP financial metrics. A reconciliation of
non-GAAP metrics to GAAP financial statements is included in this
release.
Management Commentary
Carlos de Solo, Chief Executive Officer, commented, “After the
merger with IMC, the recent closing of our acquisition of Senior
Medical Associates and the anticipated closing of the DNF
acquisition this quarter, CareMax has a strong, sustainable
foundation of profitability in South and now Central Florida from
which to take our model nationwide. In our current markets, we are
focused on organic growth and constantly improving our care model
for the benefit of our members.”
"Anchored by our collaborations with Anthem and The Related
Companies, we are developing a unique ecosystem whereby the most
underserved communities receive access to our care model. We
believe we have the ability to deliver consistent, replicable
results nationwide, giving us conviction to accelerate our de novo
growth with a goal of opening at least 75 new CareMax centers in
the next three years. These key agreements provide us with a
multi-faceted growth strategy designed to enable us to confidently
expand at a rapid pace.”
“To supplement the outstanding talent in CareMax and IMC, we are
in the process of building out an executive team that is capable of
implementing our ambitious plans. We are making these investments
in talent to maximize the opportunities in our base business as
well as execute on the growth opportunities ahead of us.”
“While we, like our peers, experienced headwinds in 2021 related
to COVID-19, we believe these challenges are unique to the current
pandemic and non-recurring in nature. I am proud and pleased to say
that our core business remains sound and growing – a testament to
our high-caliber medical and support personnel who have worked
tirelessly throughout the pandemic to meet our members’ needs.”
Conference Call
Management will host a conference call at 8:30 am ET today to
discuss the results and business activities. Interested parties may
participate in the call by dialing:
(877) 407-9753 (Domestic) or
(201) 493-6739 (International)
The conference call will also be available on the Company's
website, ir.caremax.com. Following the live call, a replay will be
available on the Company's website.
An investor presentation has also been posted to
ir.caremax.com
About CareMax
CareMax is a technology-enabled care platform providing
value-based care and chronic disease management to seniors. CareMax
operates medical centers that offer a comprehensive suite of
healthcare and social services, and a proprietary software and
services platform that provides data, analytics, and rules-based
decision tools/workflows for physicians across the United States.
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 and strategy. 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 impact of COVID-19 or any variant thereof on the
Company's business and results of operation; the availability of
sites for medical facilities and the costs of opening such medical
facilities; 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; the Company or any
other party’s ability to fulfill contractual obligations; and the
Company's ability to recruit and retain qualified team members and
independent physicians. 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 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 margin thereof and pro forma
medical expense ratio 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 expense and income are excluded or included
in determining these non-GAAP financial measures. In order to
compensate for these limitations, management presents non-GAAP
financial measures in connection with GAAP results. You should
review the Company’s audited financial statements, which have been
filed by the Company with the SEC.
A reconciliation for Adjusted EBITDA to the most directly
comparable GAAP financial measures is included below.
Use of Pro Forma Financial Information and Pro Forma Non-GAAP
Financial Information
The unaudited pro forma statements of operations below are
provided for informational purposes only and is not necessarily
indicative of the operating results or financial position that
would have occurred if the acquisitions of IMC, Care Holdings, and
SMA had occurred in the stated historical periods, nor is it
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, Care Holdings, and SMA, any
integration costs or tax deductibility of transaction costs. Pro
forma medical expense ratio is calculated from the unaudited pro
forma statements of operations.
Additionally, Adjusted EBITDA presented on a pro forma basis
gives effect to the acquisitions of IMC, Care Holdings, and SMA as
if they had occurred in historical periods, which does not
necessarily reflect what the Company’s Adjusted EBITDA would have
been had the acquisitions occurred on the dates indicated. A
reconciliation of projected 2021 pro forma 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
non-GAAP financial measure. 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.
CAREMAX, INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands, except share
and per share data)
(Unaudited) June 30,
2021
December 31, 2020
ASSETS
CURRENT ASSETS
Cash
$
170,080
$
4,934
Restricted cash
1,956
-
Accounts receivable, net
32,031
9,395
Inventory
190
15
Prepaid expenses, net
3,449
183
Risk settlements due from providers
288
80
Due from related parties
-
274
Total Current Assets
207,994
14,881
Property and equipment, net
12,728
4,796
Goodwill
356,360
10,068
Intangible assets, net
50,357
8,575
Deferred debt issuance costs
2,195
-
Other assets
998
183
Total Assets
$
630,632
$
38,503
LIABILITIES AND STOCKHOLDERS'/MEMBERS'
EQUITY
CURRENT LIABILITIES
Accounts payable
$
2,546
$
1,044
Accrued expenses
10,689
2,572
Accrued interest payable
264
149
Risk settlements due to providers
178
643
Current portion of long-term debt
6,672
1,004
Due to related parties
-
39
Other current liabilities
5,771
-
Total Current Liabilities
26,120
5,451
Derivative warrant liabilities
27,337
-
Long-term debt, less current portion
114,222
26,325
Other Liabilities
2,639
-
Total Liabilities
170,318
31,776
COMMITMENTS AND CONTINGENCIES (Note
14)
STOCKHOLDERS'/MEMBER'S EQUITY
Class A common stock ($0.0001 par value;
250,000,000 shares authorized; 80,632,457 shares issued and
outstanding at June 30, 2021)
8
-
Additional paid-in-capital
199,541
-
Retained earnings
260,765
-
Member units (no par value, 200
authorized, issued and outstanding at December 31, 2020)
-
223
Members' equity
-
6,504
Total Stockholders'/Members'
Equity
460,314
6,727
Total Liabilities and
Stockholders'/Members' Equity
$
630,632
$
38,503
CAREMAX, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per
share data)
Three Months Ended
Three Months Ended
Six Months Ended
Six Months Ended
June 30
June 30
June 30
June 30
2021
2020
2021
2020
Revenue
Medicare risk-based revenue
$
37,761
$
25,746
$
65,577
$
50,841
Medicaid risk-based revenue
5,449
-
5,449
-
Other revenue
1,709
49
1,811
188
Total Revenue
44,919
25,795
72,837
51,029
Expenses
External provider costs
35,535
15,958
53,694
31,806
Cost of care
7,867
3,886
13,220
7,903
Sales and marketing
775
272
1,066
500
Corporate, general and administrative
8,881
1,456
10,676
2,740
Depreciation and amortization
1,437
356
1,951
712
Acquisition related costs
149
-
149
-
Total costs and expenses
54,644
21,928
80,756
43,661
Operating income (loss)
(9,725
)
3,867
(7,919
)
7,368
Interest income (expense), net
(792
)
(403
)
(1,296
)
(730
)
Gain (loss) on remeasurement of warrant
liabilities
1,795
-
1,795
-
Gain (loss) on extinguishment of debt
1,358
-
1,358
-
Other expense/(income)
-
-
-
-
(Loss) income before income tax
(7,364
)
3,464
(6,062
)
6,638
Income tax provision (benefit)
-
-
-
-
Net income (loss)
$
(7,364
)
$
3,464
$
(6,062
)
$
6,638
Net income (loss) attributable to
non-controlling interest
-
82
-
(8
)
Net income (loss) attributable to
controlling interest
$
(7,364
)
$
3,382
$
(6,062
)
$
6,646
Net income (loss) attributable to CareMax,
Inc. class A common stockholders
$
(7,364
)
$
3,382
$
(6,062
)
$
6,646
Weighted average basic shares
outstanding
28,404,759
10,796,069
19,649,057
10,796,069
Weighted average diluted shares
outstanding
28,404,759
10,796,069
19,649,057
10,796,069
Net income (loss) per share
Basic
$
(0.26
)
$
0.31
$
(0.31
)
$
0.62
Diluted
$
(0.26
)
$
0.31
$
(0.31
)
$
0.62
CAREMAX, INC.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Six Months Ended June
30,
Six Months Ended June
30,
2021
2020
CASH FLOWS FROM OPERATING
ACTIVITIES
Net (Loss)/Income
$
(6,062
)
$
6,638
Adjustments to reconcile net (loss)/income
to net cash
Used in operating activities:
Depreciation expense
640
431
Amortization expense
1,320
281
Amortization of discount on debt and
related issuance costs
135
35
Change in fair value of warrant
liabilities
(1,795
)
-
Gain on extinguishment of debt
(1,358
)
-
Changes in operating assets and
liabilities:
Accounts receivable
1,267
(3,607
)
Prepaid expenses
(1,322
)
9
Risk settlements due from/due to
providers
(208
)
128
Due from related parties
235
68
Other assets
(275
)
18
Accounts payable
(2,113
)
(52
)
Accrued expenses
6,454
(55
)
Other liabilities
(16
)
-
Accrued interest
115
-
Net Cash (Used In)/Provided by Operating
Activities
(2,983
)
3,894
CASH FLOWS FROM INVESTING
ACTIVITIES
Purchase of property and equipment
(1,527
)
(1,592
)
Acquisition of businesses
(210,252
)
-
Purchase of noncontrolling interest
ownership
-
(267
)
Net Cash Used in Investing Activities
(211,779
)
(1,859
)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from issuance of Class A common
stock
410,000
Issuance costs of Class A common stock
(12,471
)
-
Recapitalization transaction
(108,799
)
-
Proceeds from borrowings on long-term debt
and credit facilities
125,000
2,500
Principal payments on long-term debt
(24,496
)
(30
)
Payment of deferred financing costs
(6,883
)
-
Long-term debt extinguishment costs
(487
)
-
Borrowing under paycheck protection
program
-
2,164
Distributions to members
-
(81
)
Net Cash Provided by Financing
Activities
381,864
4,553
NET INCREASE IN CASH
167,102
6,588
Cash - Beginning of Period
4,934
4,438
CASH - END OF PERIOD
$
172,036
$
11,026
Pro Forma Statements of Operations (Unaudited)1
Three Months Ended June
30,
$'000s
2021
2020
$ Change
% Change
Revenue
Medicare Risk-Based Revenue
$
71,902
$
67,883
$
4,019
5.9
%
Medicaid Risk-Based Revenue
20,454
14,828
5,626
37.9
%
Other Revenue
5,424
4,980
444
8.9
%
Total Revenue
$
97,780
$
87,691
$
10,089
11.5
%
Operating Expense
External Provider Costs
73,491
56,027
(17,464
)
31.2
%
Cost Of Care
12,762
10,465
(2,297
)
21.9
%
Sales And Marketing
1,688
1,245
(444
)
35.6
%
Corporate, General And Administrative
20,720
8,407
(12,313
)
146.5
%
Depreciation and Amortization
3,780
4,077
297
(7.3
)%
Total Costs and Expenses
$
112,441
$
80,220
$
(32,221
)
40.2
%
Operating (loss) income
$
(14,661
)
$
7,471
$
(22,133
)
(296.2
)%
Interest Expense, Net
1,666
1,456
(210
)
14.4
%
Change in Warrant Liability
(1,795
)
–
1,795
Loss/(Gain) on Extinguishment of Debt
(1,358
)
–
1,358
Other Expense/(Income)
(29
)
190
218
(115.2
)%
Income/(Loss) Before Income
Taxes
$
(13,145
)
$
5,826
$
(18,971
)
(325.6
)%
Provision for Income Taxes
–
–
–
Net Income/(Loss)
$
(13,145
)
$
5,826
$
(18,971
)
(325.6
)%
Six Months Ended June
30,
$'000s
2021
2020
$ Change
% Change
Revenue
Medicare Risk-Based Revenue
$
143,648
$
137,119
$
6,529
4.8
%
Medicaid Risk-Based Revenue
39,351
25,655
13,696
53.4
%
Other Revenue
10,218
10,373
(155
)
(1.5
)%
Total Revenue
$
193,217
$
173,147
$
20,070
11.6
%
Operating Expense
External Provider Costs
139,093
112,883
(26,210
)
23.2
%
Cost Of Care
25,836
22,841
(2,995
)
13.1
%
Sales And Marketing
3,170
2,330
(840
)
36.1
%
Corporate, General And Administrative
31,493
16,796
(14,697
)
87.5
%
Depreciation and Amortization
7,265
8,424
1,159
(13.8
)%
Total Costs and Expenses
$
206,857
$
163,274
$
(43,584
)
26.7
%
Operating (loss) income
$
(13,641
)
$
9,874
$
(23,514
)
(238.2
)%
Interest Expense, Net
3,063
2,915
(147
)
5.1
%
Change in Warrant Liability
(1,795
)
–
1,795
Loss/(Gain) on Extinguishment of Debt
(1,358
)
–
1,358
Other Expense/(Income)
385
389
4
(1.1
)%
Income/(Loss) Before Income
Taxes
$
(13,935
)
$
6,569
$
(20,504
)
(312.1
)%
Provision for Income Taxes
–
–
–
Net Income/(Loss)
$
(13,935
)
$
6,569
$
(20,504
)
(312.1
)%
1 Figures give effect to the combinations
of IMC, Care Holdings, and SMA as if they had occurred in
historical periods.
Pro Forma Non-GAAP Financial Summary (Unaudited)1
Non-GAAP Financial Summary
$'000s
1Q20
2Q20
3Q20
4Q20
1Q21
2Q21
Medicare Risk Revenue
$69,236
$67,883
$69,104
$71,134
$71,746
$71,902
Medicaid Risk Revenue
10,827
14,828
20,565
19,062
18,897
20,454
Other Revenue
5,393
4,980
4,032
4,382
4,793
5,424
Total Revenue
$85,456
$87,691
$93,701
$94,578
$95,436
$97,780
External Provider Costs
56,856
56,027
63,719
61,483
65,091
74,491
Cost of Care
12,376
10,465
12,222
13,559
13,074
12,762
Platform Contribution
$16,224
$21,199
$17,760
$19,536
$17,271
$10,527
Platform Contribution Margin (%)
19.0%
24.2%
19.0%
20.7%
18.1%
10.8%
Sales and Marketing
1,085
1,245
1,293
1,431
1,482
1,688
Corporate, General and
Administrative
8,039
5,720
6,182
5,831
7,138
7,293
Adjusted EBITDA
$7,100
$14,234
$10,285
$12,274
$8,651
$1,546
Adjusted EBITDA Margin (%)
8.3%
16.2%
11.0%
13.0%
9.1%
1.6%
1 Figures give effect to the combinations
of IMC, Care Holdings, and SMA as if they had occurred in
historical periods.
Select Pro Forma Non-GAAP Operating Metrics1
Pro Forma Non-GAAP Operating
Metrics
Mar-20
Jun-20
Sep-20
Dec-20
Mar-21
Jun-21
Centers
31
31
32
34
34
34
Markets
1
1
1
1
1
1
Patients (MCREM)2
28,800
31,500
33,000
32,400
33,100
34,700
At-Risk
85.2%
86.8%
85.9%
87.8%
87.0%
86.3%
Platform Contribution ($, Millions)3
$16.2
$21.2
$17.8
$19.5
$17.3
$10.5
1 Figures give effect to the combinations
of IMC, Care Holdings, and SMA as if they had occurred in
historical periods.
2 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.
3 Platform contribution defined as
risk-based revenues less external provider costs and cost of
care,
excluding depreciation and
amortization.
Reconciliation to Adjusted EBITDA1
Reconciliation to Adjusted
EBITDA
$'000s
1Q20
2Q20
3Q20
4Q20
1Q21
2Q21
Net Income (Loss)
$3,174
$3,464
($357)
$1,293
$1,302
($7,364)
GAAP Pro Forma Adjustments
(2,430)
2,362
1,139
2,905
(2,091)
(5,781)
Pro Forma Net Income
$744
$5,826
$782
$4,198
($789)
($13,145)
Interest Expense
1,459
1,456
1,442
1,440
1,396
1,666
Depreciation & Amortization
4,347
4,077
4,175
4,226
3,485
3,780
Change in Warrant Liability
–
–
–
–
–
(1,795)
Loss/(Gain) on Extinguishment of Debt
–
–
–
–
–
(1,358)
Other Expenses
199
190
301
(345)
413
(29)
EBITDA
$6,749
$11,548
$6,701
$9,520
$4,505
($10,881)
Other
Adjustments
Non-Recurring Expenses
(306)
2,008
2,831
1,874
2,979
8,622
Acquistions Costs
656
678
789
893
1,168
3,806
Discontinued Operations
–
(0)
(35)
(12)
(1)
(0)
Adjusted EBITDA
$7,100
$14,234
$10,285
$12,274
$8,651
$1,546
1 Figures give effect to the combinations
of IMC, Care Holdings, and SMA as if they had occurred in
historical periods.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210813005172/en/
CareMax, Inc. Media
Christine Bucan (305) 542-8855 Christine@thinkbsg.com
Investor Relations Ben Quirk (415) 640-3715
ben.quirk@caremax.com
The Equity Group Inc. Devin Sullivan (212) 836-9608
dsullivan@equityny.com
CareMax (NASDAQ:CMAXW)
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