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Name | Symbol | Market | Type |
---|---|---|---|
CareMax Inc | NASDAQ:CMAXW | NASDAQ | Equity Warrant |
Price Change | % Change | Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.0195 | 0.0151 | 0.0175 | 0 | 17:43:17 |
CareMax, Inc. (NASDAQ: CMAX; CMAXW), a leading technology-enabled provider of value-based care to seniors, announced today financial results for the third quarter ended September 30, 2021.
Third Quarter 2021 Results1
Business Highlights
1GAAP 2021 financial information includes the activities of IMC Medical Group Holdings, LLC and CareHoldings for the period from June 8, 2021 to (and including) September 30, 2021 (115 days), Senior Medical Associates (SMA) for the period from June 18, 2021 to (and including) September 30, 2021 (105 days), and DNF Medical Centers for the period from September 1, 2021 to (and including) September 30, 2021 (30 days).
2Medical Expense Ratio equals external provider costs divided by Medicare and Medicaid risk-based revenues.
3Adjusted EBITDA and Platform Contribution are non-GAAP financial metrics. A reconciliation of non-GAAP metrics to GAAP financial statements is included in this release.
4Pro forma revenue and Adjusted EBITDA represent run-rate revenue and Adjusted EBITDA based on expected membership at the end of 2021, including all acquisitions expected to be closed by year-end and an estimated $23 million negative from COVID.
Management Commentary
“We are pleased that our third quarter continues to illustrate the effectiveness of our model in delivering proactive and personalized primary healthcare,” said Carlos de Solo, Chief Executive Officer. “By reducing spend from avoidable hospital utilization and investing those dollars back into our whole person health care model, we are closing the loop on the care continuum for some of our nation’s most vulnerable patients while improving clinical outcomes and driving down costs.”
“Our Medical Expense Ratio for the third quarter of 2021 shows that we can grow while maintaining better patient outcomes. As a result, despite headwinds related to COVID and investments in our platform, the fundamentals of our business are performing in line with our forecast, and management is pleased to reaffirm our 2021 guidance. In addition, based on current trends, we expect limited impact to risk-based revenues due to COVID in 2022 and are also optimistic that COVID utilization headwinds will subside in 2022.”
“From a growth perspective, we are pleased to welcome DNF Medical Centers to the CareMax family. Dr. Norberto Fleites, founder of DNF, built a tremendous company, and we are honored to continue to his legacy as we work to expand that platform by implementing our tested care model, increasing enrollments in existing centers, and building new centers.”
“We expect our base business to continue its strong performance while we maintain clear line of sight to opening at least 15 de novo centers in 2022 in New York City, Memphis and other markets. By targeting underserved communities and affordable housing developments, we will continue our focus on improving health disparities for some of the most vulnerable populations, ensuring rewarding careers for our team members and delivering value for our shareholders.”
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 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 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 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, 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)
September 30, 2021
December 31, 2020
ASSETS
CURRENT ASSETS
Cash
$
80,451
$
4,934
Accounts receivable, net
33,624
9,395
Inventory
398
15
Prepaid expenses
17,926
183
Risk settlements due from providers
464
80
Due from related parties
-
274
Total Current Assets
132,863
14,881
Property and equipment, net
16,163
4,796
Goodwill
449,470
10,068
Intangible assets, net
61,575
8,575
Deferred debt issuance costs
2,084
-
Other assets
1,109
183
Total Assets
$
663,264
$
38,503
LIABILITIES AND STOCKHOLDERS'/MEMBERS' EQUITY
CURRENT LIABILITIES
Accounts payable
$
5,677
$
1,044
Accrued expenses
8,346
2,572
Accrued interest payable
-
149
Risk settlements due to providers
171
643
Current portion of long-term debt
6,279
1,004
Due to related parties
-
39
Other current liabilities
2,831
-
Total Current Liabilities
23,304
5,451
Derivative warrant liabilities
17,110
-
Long-term debt, less current portion
112,890
26,325
Other liabilities
6,032
-
Total Liabilities
159,336
31,776
COMMITMENTS AND CONTINGENCIES (Note 14)
STOCKHOLDERS'/MEMBER'S EQUITY
Class A common stock ($0.0001 par value; 250,000,000 shares authorized; 87,073,985 shares issued and outstanding at September 30, 2021)
9
-
Additional paid-in-capital
506,108
-
Accumulated deficit
(2,189
)
-
Member units (no par value, 200 authorized, issued and outstanding at December 31, 2020)
-
223
Members' equity
-
6,504
Total Stockholders'/Members' Equity
503,928
6,727
Total Liabilities and Stockholders'/Members' Equity
$
663,264
$
38,503
CAREMAX, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except share and per share data)
Three Months Ended September 30,
Three Months Ended September 30,
Nine Months Ended September 30,
Nine Months Ended September 30,
2021
2020
2021
2020
Revenue
Medicare risk-based revenue
$
76,428
$
24,242
$
142,005
$
75,083
Medicaid risk-based revenue
20,884
-
26,333
-
Other revenue
7,308
64
9,118
251
Total Revenue
104,620
24,306
177,456
75,334
Operating Expenses
External provider costs
73,329
17,304
127,023
49,110
Cost of care
21,602
4,341
34,822
12,244
Sales and marketing
1,274
311
2,340
811
Corporate, general and administrative
13,589
1,885
24,264
4,626
Depreciation and amortization
5,176
359
7,127
1,072
Acquisition related costs
879
-
1,028
-
Total operating expenses
115,849
24,200
196,604
67,863
Operating income (loss)
(11,229
)
106
(19,148
)
7,471
Interest (expense), net
(1,291
)
(387
)
(2,587
)
(1,117
)
Gain on remeasurement of warrant liabilities
10,227
-
12,022
-
Gain on extinguishment of debt, net
279
-
1,637
-
Other income (expense), net
(840
)
-
(840
)
-
Income (loss) before income tax
(2,854
)
(281
)
(8,916
)
6,354
Income tax provision (benefit)
-
-
-
-
Net income (loss)
$
(2,854
)
$
(281
)
$
(8,916
)
$
6,354
Net income (loss) attributable to non-controlling interest
-
34
-
26
Net income (loss) attributable to controlling interest
$
(2,854
)
$
(315
)
$
(8,916
)
$
6,328
Net income (loss) attributable to CareMax, Inc. Class A common stockholders
$
(2,854
)
$
(315
)
$
(8,916
)
$
6,328
Weighted average basic shares outstanding
82,552,520
10,796,069
40,847,294
10,796,069
Weighted average diluted shares outstanding
82,552,520
10,796,069
40,847,294
10,796,069
Net income (loss) per share
Basic
$
(0.03
)
$
(0.03
)
$
(0.22
)
$
0.59
Diluted
$
(0.03
)
$
(0.03
)
$
(0.22
)
$
0.59
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
Nine Months Ended September 30,
Nine Months Ended September 30,
2021
2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss)/Income
$
(8,916
)
$
6,354
Adjustments to reconcile net (loss)/income to net cash
(Used in)/provided by operating activities:
Depreciation expense
1,657
626
Amortization expense
5,488
448
Amortization of debt issuance costs
522
52
Stock compensation expense
966
-
Change in fair value of warrant liabilities
(12,022
)
-
Gain on extinguishment of debt
(1,637
)
-
Changes in operating assets and liabilities:
Accounts receivable
4,296
(583
)
Inventory
67
(3
)
Prepaid expenses
(1,371
)
55
Risk settlements due from/due to providers
(384
)
(92
)
Due to/from related parties
235
(141
)
Other assets
(312
)
12
Accounts payable
1,583
(347
)
Accrued expenses
(3
)
(381
)
Other liabilities
1,178
-
Accrued interest
(149
)
-
Net Cash (Used In)/Provided by Operating Activities
(8,802
)
5,998
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment
(2,967
)
(1,789
)
Acquisition of businesses
(298,344
)
(2,656
)
Asset Purchase Agreement Holdback Payment
-
(333
)
Purchase of noncontrolling interest ownership
-
(316
)
Net Cash Used in Investing Activities
(301,311
)
(5,094
)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings under revolving loan commitment
-
2,467
Loan from Paycheck Protection Program
-
2,164
Proceeds from issuance of Class A common stock
415,000
-
Issuance costs of Class A common stock
(12,471
)
-
Reverse recapitalization
(108,386
)
-
Proceeds from borrowings on long-term debt and credit facilities
125,000
-
Principal payments on long-term debt
(26,143
)
(251
)
Payment of deferred financing costs
(6,883
)
-
Payment of debt prepayment penalties
(487
)
-
Distributions to members
-
(144
)
Net Cash Provided by Financing Activities
385,630
4,236
NET INCREASE IN CASH
75,517
5,140
Cash - Beginning of Period
4,934
4,438
CASH - END OF PERIOD
$
80,451
$
9,578
Non-GAAP Financial Summary (Unaudited*)
$'000s
March 31, 2020
June 30, 2020
September 30, 2020
December 31, 2020
March 31, 2021
June 30, 2021
September 30, 2021
Medicare Risk Revenue
$
63,373
$
62,040
$
63,188
$
65,210
$
65,394
$
66,618
$
76,428
Medicaid Risk Revenue
10,827
14,828
20,565
19,062
18,897
20,454
20,884
Other Revenue
4,608
4,126
3,351
3,801
4,127
4,839
7,308
Total Revenue
78,808
80,994
87,104
88,073
88,418
91,911
104,620
External Provider Costs
53,472
52,780
60,158
57,775
60,278
70,466
73,329
Cost of Care
11,246
10,093
11,417
12,446
13,427
13,246
20,315
Platform Contribution
14,090
18,121
15,529
17,852
14,712
8,199
10,976
Platform Contribution Margin (%)
17.9
%
22.4
%
17.8
%
20.3
%
16.6
%
8.9
%
10.5
%
Sales and Marketing
$
1,057
$
1,245
$
1,290
$
1,431
$
391
$
1,688
$
1,274
Corporate, General and Administrative
7,858
5,667
6,069
6,519
7,197
6,347
8,668
Adjusted EBITDA
5,175
11,209
8,170
9,901
7,124
163
1,034
De Novo Losses
3
24
68
484
184
364
195
Adjusted EBITDA
$
5,178
$
11,233
$
8,237
$
10,385
$
7,308
$
527
$
1,229
Adjusted EBITDA Margin (%)
6.6
%
13.9
%
9.5
%
11.8
%
8.3
%
0.6
%
1.2
%
* Figures give effect to the Business Combinations of IMC and Care Holdings as if they had occurred in historical periods. Figures may not sum due to rounding.
*Figures may not sum due to rounding
Nine Months Ended September 30, 2021 compared to Nine Months Ended September 30, 2020 Non-GAAP Financial Summary (Unaudited*)
Nine Months Ended
September 30, 2021
September 30, 2020
Y/Y Change
$'000s
Medicare Risk Revenue
$
208,440
$
188,601
$
19,839
Medicaid Risk Revenue
60,235
46,220
14,016
Other Revenue
16,274
12,085
4,189
Total Revenue
284,949
246,906
38,044
External Provider Costs
204,073
166,411
(37,663
)
Cost of Care
46,988
32,755
(14,233
)
Platform Contribution
33,887
47,740
(13,853
)
Platform Contribution Margin (%)
11.9
%
19.3
%
(7.4
%)
Sales and Marketing
$
3,354
$
3,592
$
238
Corporate, General and Administrative
22,212
19,594
(2,618
)
Adjusted EBITDA
8,321
24,554
(16,233
)
De Novo Losses
743
94
649
Adjusted EBITDA
$
9,064
$
24,648
$
(15,584
)
Adjusted EBITDA Margin (%)
3.2
%
10.0
%
(6.8
%)
* Figures give effect to the Business Combinations of IMC and Care Holdings as if they had occurred in historical periods. Figures may not sum due to rounding.
*Figures may not sum due to rounding
Non-GAAP Operating Metrics*
March 31, 2020
June 30, 2020
September 30, 2020
December 31, 2020
March 31, 2021
June 30, 2021
September 30, 2021
Centers
21
21
22
24
24
34
40
Markets
1
1
1
1
1
1
1
Patients (MCREM)**
24,800
27,500
29,000
28,400
29,200
35,300
40,400
At-Risk
84.8
%
86.7
%
85.6
%
87.7
%
87.0
%
84.1
%
87.2
%
Platform Contribution ($, Millions)***
$
14.1
$
18.1
$
15.5
$
17.9
$
14.7
$
8.2
$
11.0
* Figures give effect to the Business Combinations of IMC and Care Holdings as if they had occurred in historical periods. Figures may not sum due to rounding.
** 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.
*** Platform contribution defined as revenue less external provider costs and cost of care, excluding depreciation and amortization.
*Figures may not sum due to rounding
Reconciliation to Adjusted EBITDA*
$'000s
March 31, 2020
June 30, 2020
September 30, 2020
December 31, 2020
March 31, 2021
June 30, 2021
September 30, 2021
Net Income (Loss)
$
3,170
$
3,466
$
(281
)
$
1,218
$
1,302
$
(7,363
)
$
(2,854
)
GAAP Pro Forma Adjustments
(3,513
)
160
(189
)
1,912
(2,730
)
(6,186
)
(0
)
Pro Forma Net Income
$
(343
)
$
3,626
$
(470
)
$
3,130
$
(1,429
)
$
(13,549
)
$
(2,854
)
Interest expense, net
1,658
1,689
1,656
1,628
1,400
1,667
1,291
Depreciation and amortization
3,514
3,244
3,368
3,418
2,979
3,339
5,176
Loss/(Gain) on remeasurement of warrant liabilities
-
-
-
-
-
(1,795
)
(10,227
)
Loss/(Gain) on extinguishment of debt
-
-
-
451
-
806
(279
)
Other expense/(income)
(2
)
(12
)
100
(997
)
212
(2,367
)
840
EBITDA
$
4,827
$
8,547
$
4,653
$
7,630
$
3,162
$
(11,900
)
$
(6,053
)
Other adjustments
Non-recurring expenses
(309
)
1,985
2,763
1,390
2,795
8,257
4,249
Acquisition costs
656
678
789
893
1,168
3,806
1,871
Stock based compensation
-
-
-
-
-
-
966
De novo losses
3
24
68
484
184
364
195
Discontinued operations
-
(0
)
(35
)
(12
)
(1
)
(0
)
-
Adjusted EBITDA
$
5,178
$
11,233
$
8,237
$
10,385
$
7,308
$
527
$
1,229
* Pro Forma figures give effect to the Business Combinations of IMC and Care Holdings as if they had occurred in historical periods. Figures may not sum due to rounding.
*Figures may not sum due to rounding
Three and Nine months Ended September 30, 2021 Reconciliation to Adjusted EBITDA
Three Months Ended
Nine Months Ended
$'000s
September 30, 2021
September 30, 2020
Y/Y Change
September 30, 2021
September 30, 2020
Y/Y Change
Net Income (Loss)
$
(2,854
)
$
(281
)
$
(2,573
)
$
(8,916
)
$
6,354
$
(15,269
)
GAAP Pro Forma Adjustments
(505
)
(189
)
(316
)
(8,917
)
(3,541
)
(5,376
)
Pro Forma Net Income (Loss)
(3,358
)
(470
)
(2,888
)
(17,832
)
2,813
(20,645
)
Interest expense
1,291
1,656
(364
)
4,358
5,002
(644
)
Depreciation and amortization
5,680
3,368
2,313
11,494
10,126
1,368
Loss/(Gain) on remeasurement of warrant liabilities
(10,227
)
-
(10,227
)
(12,022
)
-
(12,022
)
Loss/(Gain) on extinguishment of debt
(279
)
-
(279
)
(1,637
)
-
(1,637
)
Other expenses
840
100
740
849
86
763
EBITDA
(6,052
)
4,653
(10,705
)
(14,790
)
18,027
(32,817
)
Other Adjustments
Non-recurring expenses
4,249
2,763
1,486
15,302
4,439
10,863
Acquisition costs
1,871
789
1,083
6,844
2,123
4,721
Stock based compensation
966
-
966
966
-
966
De novo losses
195
68
127
743
94
649
Discontinued operations
-
(35
)
35
(1
)
(35
)
34
Adjusted EBITDA
$
1,229
$
8,237
$
(7,009
)
$
9,064
$
24,648
$
(15,584
)
*Pro Forma figures give effect to the Business Combinations of IMC and Care Holdings as if they had occurred in historical periods. Figures may not sum due to rounding.
*Figures may not sum due to rounding
View source version on businesswire.com: https://www.businesswire.com/news/home/20211115005688/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
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