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CareMax, Inc. Announces First Quarter 2022 Financial Results

CMAX

  • First Quarter 2022 Medicare Advantage Membership of 34,000, up 106% year-over-year1
  • First Quarter 2022 GAAP Total Revenue of $136.9 million, up 390% Compared to First Quarter 2021 Total Revenue of $27.9 Million, or up 55% on a Pro Forma Basis1
  • Reaffirms Full Year 2022 Guidance
  • Entered into a $300.0 million Credit Agreement

CareMax, Inc. (NASDAQ: CMAX; CMAXW), a leading technology-enabled provider of value-based care to seniors, announced today financial results for the first quarter ended March 31, 2022.

“We had a strong start to the year and continue to execute on our strategy of maintaining profitable growth in our core markets while opening de novo centers in new markets” said Carlos de Solo, Chief Executive Officer. “Our entry into the Memphis, Tennessee and New York City markets is the first step in our national expansion plans as we progress on our vision to improve healthcare and quality of life for underserved communities across the U.S.”

First Quarter 2022 Results1,2

  • Total revenue was $136.9 million, up 55% year-over-year.
  • Medical Expense Ratio was 72.6%, compared to 71.5% for the first quarter of 2021.3
  • Net loss was $16.8 million, or $(0.19) per diluted share.
  • Adjusted EBITDA was $5.9 million; excluding the estimated impacts from COVID, Adjusted EBITDA would have been $6.8 million.
  • Platform Contribution was $17.3 million; excluding the estimated impacts from COVID, Platform Contribution would have been $18.2 million.

Financial Outlook for Full Year 20221,2

CareMax, Inc. is reaffirming the following full year 2022 financial guidance:

  • Year-end Medicare Advantage membership of 38,000 to 40,000, up 13% to 19% year-over-year.
  • Total revenue of $540 million to $560 million, up 34% to 39% year-over-year, compared to $403 million for the prior year.
  • Adjusted EBITDA in the range of $30 million to $40 million, up 125% to 200% year-over-year, compared to $13.3 million for the prior year. For 2022, Adjusted EBITDA also excludes losses from de novo centers.
  • The Company continues to expect to open 15 de novo centers in 2022, inclusive of the three opened in the first quarter of 2022.

1Year-over-year comparisons to 2021 are pro forma for the business combinations of IMC Medical Group Holdings and Care Holdings as if they had occurred on January 1, 2021. A reconciliation of the pro forma financial information to GAAP financial statements is included in this earnings release.

2Adjusted EBITDA and Platform Contribution are non-GAAP financial metrics. A reconciliation of non-GAAP metrics to GAAP financial statements is included in this earnings release.

3 Medical Expense Ratio equals external provider costs divided by Medicare and Medicaid risk-based revenues.

New $300.0 Million Credit Agreement

On May 10, 2022, CareMax entered into a new $300.0 million Credit Agreement consisting of a $190.0 million initial term loan and a $110.0 million delayed draw term loan. The proceeds of the initial term loan will be used in part to repay in full CareMax’s existing $120.3 million term loan maturing June 8, 2026, with additional proceeds expected to be used to support CareMax’s de novo growth strategy and fund working capital needs. Additional information regarding the new Credit Agreement will be included in the Company’s Current Report on Form 8-K, to be filed with the U.S. Securities and Exchange Commission.

Conference Call Details

Management will host a conference call at 8:30 am ET today to discuss the results and business activities. A live audio webcast as well as related presentation materials will be available at ir.caremax.com. The conference call can also be accessed by dialing (888) 440-6519 for U.S. participants, or (646) 960-0384 for international participants, and referring conference ID 4345921. Following the live call, a replay will be available on the Company's website

About CareMax

CareMax is a technology-enabled care platform providing value-based care and chronic disease management to seniors. CareMax operates 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, the effects of the restatement of the Company’s past financial statements and the filing of the Company’s periodic reports. 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 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 its credit agreement; the Company or any other party’s ability to fulfill contractual obligations; the impact of board leadership changes; the Company's ability to recruit and retain qualified team members and independent physicians; and risks related to future acquisitions. 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 margin thereof and Platform Contribution and margin thereof and 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. 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. You should review the Company’s audited financial statements, which have been filed by the Company with the SEC.

A reconciliation for Adjusted EBITDA and Platform Contribution to the most directly comparable GAAP financial measures is included below. A reconciliation of projected 2022 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.

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

(Unaudited)

March 31, 2022

December 31, 2021

ASSETS

CURRENT ASSETS

Cash

$

32,740

$

47,917

Accounts receivable, net

53,581

41,998

Inventory

702

550

Prepaid expenses

20,045

17,040

Risk settlements due from providers

655

539

Total Current Assets

107,723

108,044

Property and equipment, net

16,895

15,993

Goodwill

464,264

464,566

Intangible assets, net

55,604

59,811

Deferred debt issuance costs

1,860

1,972

Other assets

2,738

2,706

Total Assets

$

649,085

$

653,092

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES

Accounts payable

$

5,165

$

3,110

Accrued expenses

12,365

8,690

Risk settlements due to providers

228

196

Current portion of long-term debt

6,272

6,275

Other current liabilities

4,107

3,687

Total Current Liabilities

28,137

21,959

Derivative warrant liabilities

11,911

8,375

Long-term debt, less current portion

109,660

110,960

Other liabilities

7,186

6,428

Total Liabilities

156,895

147,722

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY

Preferred stock (1,000,000 authorized and zero outstanding as of March 31, 2022 and December 31, 2021)

-

-

Class A common stock ($0.0001 par value; 250,000,000 shares authorized; 87,367,972 shares issued and outstanding at March 31, 2022 and December 31, 2021)

9

9

Additional paid-in-capital

508,945

505,327

Retained (deficit) earnings

(16,763

)

33

Total Stockholders' Equity

492,190

505,370

Total Liabilities and Stockholders' Equity

$

649,085

$

653,092

CAREMAX, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(Unaudited)

Three Months Ended
March 31,

Three Months Ended
March 31,

2022

2021

Revenue

Medicare risk-based revenue

$

107,747

$

27,816

Medicaid risk-based revenue

20,165

-

Other revenue

9,008

102

Total revenue

136,920

27,918

Operating expenses

External provider costs

92,856

18,159

Cost of care

27,349

5,353

Sales and marketing

3,301

291

Corporate, general and administrative

18,978

1,795

Depreciation and amortization

5,062

514

Acquisition related costs

266

-

Total operating expenses

147,811

26,112

Operating (loss) income

(10,890

)

1,806

Interest expense

(1,728

)

(504

)

Loss on remeasurement of warrant liabilities

(3,536

)

-

Other income (expense), net

(462

)

-

(Loss) income before income tax

(16,616

)

1,302

Income tax provision

(181

)

-

Net (loss) income

$

(16,797

)

$

1,302

Weighted average basic shares outstanding

87,367,972

10,796,069

Weighted average diluted shares outstanding

87,367,972

10,796,069

Net (loss) income per share

Basic

$

(0.19

)

$

0.12

Diluted

$

(0.19

)

$

0.12

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

Three Months Ended
March 31,

Three Months Ended
March 31,

2022

2021

CASH FLOWS FROM OPERATING ACTIVITIES

Net (loss)/Income

$

(16,797

)

$

1,302

Adjustments to reconcile net (loss)/income to net cash

Depreciation and amortization expense

5,062

514

Amortization of debt issuance costs

378

35

Stock compensation expense

1,087

-

Loss on remeasurement of warrant liabilities

3,536

-

Other non-cash, net

202

-

Changes in operating assets and liabilities:

Accounts receivable

(10,992

)

639

Inventory

(152

)

(1

)

Prepaid expenses

(475

)

15

Risk settlements due from/due to providers

(84

)

(281

)

Due to/from related parties

-

(392

)

Other assets

(52

)

(205

)

Accounts payable

1,470

1,160

Accrued expenses

3,675

(134

)

Other liabilities

1,002

720

Net Cash (Used In)/Provided by Operating Activities

(12,139

)

3,372

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property and equipment

(1,467

)

(1,690

)

Net Cash Used in Investing Activities

(1,467

)

(1,690

)

CASH FLOWS FROM FINANCING ACTIVITIES

Principal payments on long-term debt

(1,570

)

(181

)

Net Cash Used In Financing Activities

(1,570

)

(181

)

NET (DECREASE)/INCREASE IN CASH

(15,176

)

1,501

Cash - Beginning of Period

47,917

4,934

CASH - END OF PERIOD

$

32,740

$

6,435

Non-GAAP Financial Summary*

$ in thousands

Mar 31,
2020

Jun 30,
2020

Sep 30,
2020

Dec 31,
2020

Mar 31,
2021

Jun 30,
2021

Sep 30,
2021

Dec 31,
2021

Mar 31,
2022

Medicare risk revenue

$

63,373

$

62,040

$

63,188

$

65,210

$

65,394

$

66,618

$

76,428

$

91,277

$

107,747

Medicaid risk revenue

10,827

14,828

20,565

19,062

18,897

20,454

20,884

20,160

20,165

Other revenue

4,608

4,126

3,351

3,801

4,127

4,839

7,308

6,869

9,008

Total revenue

78,808

80,994

87,104

88,073

88,418

91,911

104,620

118,306

136,920

External provider costs

53,472

52,780

60,158

57,775

60,278

70,466

73,329

79,724

92,856

Cost of care

11,246

10,093

11,417

12,446

13,427

13,246

20,315

22,538

26,791

Platform contribution

14,090

18,121

15,529

17,852

14,712

8,199

10,976

16,044

17,274

Platform contribution margin (%)

17.9

%

22.4

%

17.8

%

20.3

%

16.6

%

8.9

%

10.5

%

13.6

%

12.6

%

Sales and marketing

$

1,057

$

1,245

$

1,290

$

1,431

$

391

$

1,688

$

1,274

$

2,615

$

3,301

Corporate, general and administrative

7,858

5,667

6,069

6,519

7,197

6,347

8,668

9,662

9,230

Adjusted operating expenses

8,915

6,912

7,359

7,951

7,588

8,036

9,942

12,276

12,531

De novo losses

3

24

68

484

184

364

195

489

1,119

Adjusted EBITDA

$

5,178

$

11,233

$

8,237

$

10,385

$

7,308

$

527

$

1,229

$

4,257

$

5,862

* 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.

Non-GAAP Operating Metrics*

Mar 31,
2020

Jun 30,
2020

Sep 30,
2020

Dec 31,
2020

Mar 31,
2021

Jun 30,
2021

Sep 30,
2021

Dec 31,
2021

Mar 31,
2022

Centers

21

21

22

24

24

34

40

45

48

Markets**

1

1

1

1

1

2

3

4

6

Patients (MCREM)***

24,800

27,500

29,000

28,400

29,200

35,300

40,400

50,100

50,600

At-Risk

84.8

%

86.7

%

85.6

%

87.7

%

87.0

%

84.1

%

87.2

%

79.3

%

79.8

%

Platform Contribution ($, Millions)****

$

14.1

$

18.1

$

15.5

$

17.9

$

14.7

$

8.2

$

11.0

$

16.0

$

17.3

* 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.

** CareMax currently defines markets as metropolitan statistical areas (MSA); markets were previously defined as states.

*** 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.

Reconciliation to Adjusted EBITDA*

$ in thousands

Mar 31,
2020

Jun 30,
2020

Sep 30,
2020

Dec 31,
2020

Mar 31,
2021

Jun 30,
2021

Sep 30,
2021

Dec 31,
2021

Mar 31,
2022

Net Income (Loss)

$

3,170

$

3,466

$

(281

)

$

1,218

$

1,302

$

10,057

$

(14,479

)

$

(3,553

)

$

(16,797

)

GAAP Pro Forma Adjustments

(3,513

)

160

(189

)

1,912

(2,730

)

(6,186

)

-

-

-

Pro Forma Net (Loss) Income

$

(343

)

$

3,626

$

(470

)

$

3,130

$

(1,429

)

$

3,871

$

(14,479

)

$

(3,553

)

$

(16,797

)

Interest expense

1,658

1,689

1,656

1,628

1,400

1,667

1,291

1,905

1,728

Depreciation and amortization

3,514

3,244

3,368

3,418

2,979

3,339

5,176

6,089

5,062

Income tax provision

-

-

-

-

-

-

-

159

181

Loss/(Gain) on remeasurement of warrant liabilities

-

-

-

-

-

(1,795

)

(10,227

)

(8,735

)

3,536

Loss/(Gain) on remeasurement of earnout liabilities

-

-

-

-

-

(17,420

)

11,625

-

-

Loss on disposal of fixed assets, net

-

-

-

-

-

-

-

50

-

Loss/(Gain) on extinguishment of debt

-

-

-

451

-

806

(279

)

7

-

Other expense/(income)

(2

)

(12

)

100

(997

)

212

(2,367

)

840

493

462

EBITDA

4,827

8,547

4,653

7,630

3,162

(11,900

)

(6,053

)

(3,585

)

(5,829

)

Other adjustments

Non-recurring expenses

(309

)

1,985

2,763

1,390

2,795

8,257

4,249

4,653

6,055

Acquisition costs

656

678

789

893

1,168

3,806

1,871

2,325

3,429

Stock based compensation

-

-

-

-

-

-

966

375

1,087

De novo losses

3

24

68

484

184

364

195

489

1,119

Discontinued operations

-

(0

)

(35

)

(12

)

(1

)

(0

)

-

-

-

Adjusted EBITDA

$

5,178

$

11,233

$

8,237

$

10,385

$

7,308

$

527

$

1,229

$

4,257

$

5,862

* Figures give effect to Business Combinations of IMC and Care Holdings as if they had occurred in historical periods. Figures may not sum due to rounding.

Reconciliation to Platform Contribution

(in thousands)

GAAP
Q1 2022

Adjustments

Non-GAAP Q1 2022

Revenue

$

136,920

$

-

$

136,920

less: External provider costs

92,856

-

92,856

less: Cost of care

27,349

(558

)

26,791

Platform Contribution

$

17,274

Estimated impact of COVID

953

953

Platform Contribution, excluding impact of COVID

$

18,227

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