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CareMax Reports First Quarter 2024 Results


CareMax, Inc. (NASDAQ: CMAX; CMAXW) ("CareMax" or the "Company"), a leading technology-enabled value-based care delivery system, today announced financial results for the first quarter ended March 31, 2024.

"During the first quarter of 2024, we believe we began to see benefits from our fourth quarter clinical efforts which became fully implemented toward the end of last year," said Carlos de Solo, Chief Executive Officer. "While absolute levels of utilization remained elevated, Medicare risk medical expense ratio in the first quarter of 2024 was favorable to our internal projections and improved compared to the prior two quarters, offset by acuity shifts in our Medicaid risk membership. We remain optimistic that these initiatives have the potential to improve our margins over time."

Mr. de Solo continued, "In addition, we continue to take steps described last quarter to maximize the value of certain assets and right-size the capital structure of our organization. As of the end of the first quarter, we had cash and equivalents of approximately $41 million and remain covered under the limited waiver of certain financial covenants in our credit facility. We have since taken further actions to preserve near-term liquidity and remain engaged with our lenders and financial advisors to evaluate strategic options for the company."

First Quarter 2024 Results

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.

2 De novo pre-opening costs represent (1) incremental payroll costs from employees specifically associated with the operational, contractual, physical, or regulatory infrastructure for de novo centers, prior to their opening; (2) legal costs directly associated with the de novo centers, incurred prior to their opening, which includes services such as execution of leases, health plan contracts and other agreements; (3) other expenses related to diligence, design, permitting, and other "soft costs" at new sites; and (4) rent and facility expenses prior to center opening. De novo post-opening losses include center-level operating losses recognized at a de novo center until the center breaks even, which consist of revenue, external provider costs and cost of care allocated to the de novo center.

About CareMax

Founded in 2011, CareMax is a value-based care delivery system that utilizes a proprietary technology-enabled platform and multi-specialty, whole person health model to deliver comprehensive, preventative and coordinated care for its members. With 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 net losses, level of indebtedness and significant cash used in operating activities have raised substantial doubt regarding its ability to continue as a going concern; the Company's future capital requirements and sources and uses of cash, including funds to satisfy its liquidity needs and the Company's ability to comply with the covenants under the agreements governing its indebtedness; the Company's ability to successfully execute its strategy, which may include divesting certain assets or businesses; the Company's ability to successfully implement cost-saving measures or achieve expected benefits under its plans to optimize performance of the MSO network and its centers; the impact of restrictions on the Company's current and future operations contained in certain of its agreements; risks relating to lease termination, lease expense escalators, lease extensions, special charges and the Company's inability to comply with provisions of its lease agreements; the Company's ability to integrate acquired businesses and realize expected benefits of any such transactions; the Company's ability to attract new patients; changes in market or industry conditions, regulatory environment, competitive conditions, and receptivity to the Company's services; changes in laws and regulations applicable to the Company's business, in particular with respect to Medicare Advantage and Medicaid; the Company's ability to maintain its relationships with health plans and other key payers; any delay, modification or cancellation of government contracts; the impact of COVID-19 or any variant thereof or any other pandemic or epidemic on the Company's business and results of operation; insolvency, credit problems or other financial difficulties that could confront the Company's counterparties in strategic acquisitions, investments and other collaborations could expose the Company to significant financial risk and significantly impact the Company's ability to expand its overall profitability; the Company's ability to address the material weakness in its internal control over financial reporting; the Company's ability to recruit and retain qualified team members and independent physicians; risks related to future acquisitions; the Company's ability to develop and maintain proper and effective internal control over financial reporting and the impact of any prior period developments. For a detailed discussion of the risk factors that could affect the Company's actual results, please refer to the risk factors identified in the Company's reports filed with the SEC. All information provided in this press release is as of the date hereof, and the Company undertakes no duty to update or revise this information unless required by law, and forward-looking statements should not be relied upon as representing the Company's assessments as of any date subsequent to the date of this press release.

Use of Non-GAAP Financial Information

Certain financial information and data contained in this press release is unaudited and does not conform to Regulation S-X. Accordingly, such information and data may not be included in, may be adjusted in, or may be presented differently in, any periodic filing, information or proxy statement, or prospectus or registration statement to be filed by the Company with the SEC. Some of the financial information and data contained in this press release, such as Adjusted EBITDA and Platform Contribution and margin thereof have not been prepared in accordance with United States generally accepted accounting principles ("GAAP"). These non-GAAP measures of financial results are not GAAP measures of our financial results or liquidity and should not be considered as an alternative to net income (loss) as a measure of financial results, cash flows from operating activities as a measure of liquidity, or any other performance measure derived in accordance with GAAP. The Company believes these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to the Company's financial condition and results of operations. The Company's management uses these non-GAAP measures for trend analyses and for budgeting and planning purposes.

The Company believes that the use of these non-GAAP financial measures provides an additional tool for investors to use in evaluating projected operating results and trends in and in comparing the Company's financial measures with other similar companies, many of which present similar non-GAAP financial measures to investors. Management does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company's financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. For this reason, these non-GAAP measures may not be comparable to other companies' similarly labeled non-GAAP financial measures. In order to compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results.

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

CAREMAX, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

(Unaudited)

 

 

 

March 31,
2024

 

December 31,
2023

ASSETS

 

 

 

 

 

 

 

 

 

Current Assets

 

 

 

 

Cash and cash equivalents

 

$

41,479

 

 

$

65,528

 

Accounts receivable, net

 

 

107,985

 

 

 

114,754

 

Other current assets

 

 

6,650

 

 

 

3,066

 

Total Current Assets

 

 

156,113

 

 

 

183,348

 

 

 

 

 

 

Property and equipment, net

 

 

47,243

 

 

 

47,918

 

Operating lease right-of-use assets

 

 

109,947

 

 

 

109,215

 

Goodwill, net

 

 

156,841

 

 

 

156,841

 

Intangible assets, net

 

 

96,092

 

 

 

101,243

 

Other assets

 

 

47,965

 

 

 

24,737

 

Total Assets

 

$

614,202

 

 

$

623,301

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

Accounts payable

 

$

6,704

 

 

$

6,275

 

Accrued expenses

 

 

20,172

 

 

 

16,224

 

Risk settlement liabilities

 

 

53,599

 

 

 

42,602

 

Related party liabilities

 

 

1,229

 

 

 

190

 

Current portion of third-party debt, net

 

 

390,995

 

 

 

364,380

 

Current portion of operating lease liabilities

 

 

32,062

 

 

 

8,975

 

Other current liabilities

 

 

2,354

 

 

 

165

 

Total Current Liabilities

 

 

507,114

 

 

 

438,812

 

Derivative liabilities

 

 

49

 

 

 

22

 

Long-term debt, net

 

 

1,879

 

 

 

21,443

 

Long-term operating lease liabilities

 

 

78,417

 

 

 

97,136

 

Other liabilities

 

 

6,340

 

 

 

4,443

 

Total Liabilities

 

 

593,800

 

 

 

561,856

 

COMMITMENTS AND CONTINGENCIES

 

 

 

 

STOCKHOLDERS' EQUITY

 

 

 

 

Preferred stock (1,000,000 shares authorized; one share issued and outstanding as of March 31, 2024 and December 31, 2023)

 

 

?

 

 

 

?

 

Class A common stock ($0.0001 par value; 8,333,333 shares authorized; 3,802,883 and 3,744,732 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively)

 

 

11

 

 

 

11

 

Additional paid-in-capital

 

 

784,736

 

 

 

782,371

 

Accumulated deficit

 

 

(764,345

)

 

 

(720,938

)

Total Stockholders' Equity

 

 

20,403

 

 

 

61,444

 

 

 

 

 

 

Total Liabilities and Stockholders' Equity

 

$

614,202

 

 

$

623,301

 

CAREMAX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share data)

(Unaudited)

 
 

 

Three Months Ended March 31,

 

2024

 

2023

Revenue

 

 

 

Medicare risk-based revenue

$

168,502

 

 

$

121,593

 

Medicaid risk-based revenue

 

37,653

 

 

 

25,626

 

Government value-based care revenue

 

18,815

 

 

 

10,010

 

Other revenue

 

7,276

 

 

 

15,754

 

Total revenue

 

232,246

 

 

 

172,983

 

 

 

 

 

Operating expenses

 

 

 

External provider costs

 

180,941

 

 

 

110,673

 

Cost of care

 

43,133

 

 

 

38,627

 

Sales and marketing

 

3,064

 

 

 

3,765

 

Corporate, general and administrative

 

20,108

 

 

 

23,965

 

Depreciation and amortization

 

6,705

 

 

 

6,576

 

Goodwill impairment

 

?

 

 

 

98,000

 

Total operating expenses

 

253,951

 

 

 

281,606

 

Operating loss

 

(21,705

)

 

 

(108,623

)

Nonoperating (expenses) income

 

 

 

Interest expense

 

(19,756

)

 

 

(10,711

)

Change in fair value of derivative liabilities

 

(2,381

)

 

 

1,107

 

Gain on remeasurement of contingent earnout liabilities

 

?

 

 

 

36,136

 

Other income, net

 

610

 

 

 

187

 

Total nonoperating (expenses) income

 

(21,526

)

 

 

26,718

 

Loss before income tax

 

(43,231

)

 

 

(81,904

)

Income tax expense

 

(177

)

 

 

(177

)

Net loss

$

(43,408

)

 

$

(82,082

)

 

 

 

 

Weighted-average basic shares outstanding 1

 

3,778,600

 

 

 

3,712,027

 

Weighted-average diluted shares outstanding 1

 

3,778,600

 

 

 

3,712,027

 

Net loss per share

 

 

 

Basic

$

(11.49

)

 

$

(22.11

)

Diluted

$

(11.49

)

 

$

(22.11

)

 

 

 

 

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

CAREMAX, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

 

 

 

Three Months Ended March 31,

 

 

2024

 

2023

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

Net loss

 

$

(43,408

)

 

$

(82,082

)

Adjustments to reconcile net loss to cash and cash equivalents:

 

 

 

 

Depreciation and amortization expense

 

 

6,705

 

 

 

6,576

 

Amortization of debt issuance costs and discounts

 

 

931

 

 

 

1,839

 

Stock-based compensation expense

 

 

2,365

 

 

 

2,298

 

Income tax expense

 

 

177

 

 

 

177

 

Change in fair value of derivative liabilities

 

 

2,381

 

 

 

(1,107

)

Gain on remeasurement of contingent earnout liabilities

 

 

?

 

 

 

(36,136

)

Payment-in-kind interest expense

 

 

5,915

 

 

 

2,453

 

Non-cash finance lease expense

 

 

156

 

 

 

?

 

Provision for credit losses

 

 

(302

)

 

 

(104

)

Goodwill impairment

 

 

?

 

 

 

98,000

 

Amortization of right-of-use assets

 

 

2,675

 

 

 

2,725

 

Other non-cash, net

 

 

134

 

 

 

1,080

 

Changes in operating assets and liabilities:

 

 

 

 

Accounts receivable

 

 

7,072

 

 

 

(7,850

)

Other current assets

 

 

(3,583

)

 

 

(1,961

)

Risk settlement liabilities

 

 

10,997

 

 

 

(454

)

Other assets

 

 

(23,332

)

 

 

(9,735

)

Operating lease liabilities

 

 

962

 

 

 

(1,280

)

Accounts payable

 

 

(188

)

 

 

(500

)

Accrued expenses

 

 

3,948

 

 

 

(29

)

Related party liabilities

 

 

1,039

 

 

 

?

 

Other liabilities

 

 

1,555

 

 

 

4,343

 

Net cash used in operating activities

 

 

(23,802

)

 

 

(21,746

)

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

Purchases of property and equipment

 

 

(126

)

 

 

(2,286

)

Net cash used in investing activities

 

 

(126

)

 

 

(2,286

)

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

Proceeds from borrowings, net

 

 

?

 

 

 

27,000

 

Principal payments of debt

 

 

(119

)

 

 

(25

)

Payments of debt issuance costs

 

 

?

 

 

 

(348

)

Net cash (used in) provided by financing activities

 

 

(119

)

 

 

26,627

 

 

 

 

 

 

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS

 

 

(24,047

)

 

 

2,596

 

Cash and cash equivalents - beginning of period

 

 

65,528

 

 

 

41,626

 

CASH AND CASH EQUIVALENTS - END OF PERIOD

 

$

41,479

 

 

$

44,222

 

The following table represents Non-GAAP Financial Summary:

Non-GAAP Financial Summary

(Unaudited)

Three Months Ended

(in thousands)

Mar 31, 2022

Jun 30, 2022

Sep 30, 2022

Dec 31, 2022

Mar 31, 2023

Jun 30,
2023

Sep 30, 2023

Dec 31, 2023

Mar 31, 2024

Medicare risk-based revenue

$

107,747

 

$

143,664

 

$

122,267

 

$

113,041

 

$

121,593

 

$

155,486

 

$

134,105

 

$

108,650

 

$

168,502

 

Medicaid risk-based revenue

 

20,165

 

 

19,896

 

 

19,852

 

 

36,620

 

 

25,626

 

 

30,054

 

 

23,950

 

 

26,263

 

 

37,653

 

Government value-based care revenue

 

?

 

 

?

 

 

?

 

 

6,389

 

 

10,010

 

 

22,206

 

 

28,067

 

 

7,425

 

 

18,815

 

Other revenue

 

9,008

 

 

8,719

 

 

15,551

 

 

8,213

 

 

15,754

 

 

16,694

 

 

15,721

 

 

9,497

 

 

7,276

 

Total revenue

 

136,920

 

 

172,279

 

 

157,670

 

 

164,263

 

 

172,983

 

 

224,440

 

 

201,843

 

 

151,835

 

 

232,246

 

 

 

 

 

 

 

 

 

 

 

External provider costs

 

92,856

 

 

120,348

 

 

106,900

 

 

104,078

 

 

110,673

 

 

156,995

 

 

139,139

 

 

165,522

 

 

180,941

 

Cost of care

 

26,854

 

 

30,293

 

 

30,150

 

 

34,581

 

 

37,627

 

 

38,865

 

 

41,599

 

 

41,915

 

 

42,229

 

Platform contribution

 

17,210

 

 

21,638

 

 

20,620

 

 

25,604

 

 

24,683

 

 

28,580

 

 

21,106

 

 

(55,602

)

 

9,075

 

Platform contribution margin (%)

 

12.6

%

 

12.6

%

 

13.1

%

 

15.6

%

 

14.3

%

 

12.7

%

 

10.5

%

 

(36.6

%)

 

3.9

%

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

3,301

 

 

2,299

 

 

2,355

 

 

3,806

 

 

3,765

 

 

3,381

 

 

3,501

 

 

3,627

 

 

3,064

 

Corporate, general and administrative

 

10,873

 

 

12,165

 

 

13,877

 

 

17,263

 

 

21,329

 

 

18,158

 

 

15,527

 

 

12,531

 

 

16,495

 

Adjusted operating expenses

 

14,174

 

 

14,464

 

 

16,232

 

 

21,069

 

 

25,094

 

 

21,539

 

 

19,028

 

 

16,158

 

 

19,559

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

$

3,035

 

$

7,175

 

$

4,388

 

$

4,535

 

$

(411

)

$

7,042

 

$

2,077

 

$

(71,759

)

$

(10,482

)

The following table provides a reconciliation of GAAP net loss to Adjusted EBITDA:

 

Reconciliation to Adjusted EBITDA

Three Months Ended

(in thousands)

Mar 31, 2022

Jun 30, 2022

Sep 30, 2022

Dec 31, 2022

Mar 31, 2023

Jun 30, 2023

Sep 30, 2023

Dec 31, 2023

Mar 31, 2024

Net loss

$

(16,797

)

$

(9,381

)

$

(22,053

)

$

10,434

 

$

(82,082

)

$

(32,376

)

$

(103,123

)

$

(465,766

)

$

(43,408

)

Interest expense

 

1,728

 

 

3,896

 

 

6,088

 

 

8,743

 

 

10,711

 

 

13,197

 

 

14,000

 

 

16,526

 

 

19,756

 

Depreciation and amortization

 

5,062

 

 

4,903

 

 

4,573

 

 

7,180

 

 

6,576

 

 

6,828

 

 

6,833

 

 

7,550

 

 

6,705

 

Remeasurement of derivative and contingent earnout liabilities

 

3,536

 

 

(7,391

)

 

7,331

 

 

(84,171

)

 

(37,242

)

 

15,786

 

 

(1,450

)

 

(961

)

 

2,381

 

Goodwill impairment

 

?

 

 

?

 

 

?

 

 

70,000

 

 

98,000

 

 

?

 

 

80,000

 

 

369,200

 

 

?

 

Stock-based compensation

 

1,087

 

 

2,788

 

 

3,611

 

 

2,786

 

 

2,298

 

 

2,464

 

 

3,243

 

 

2,595

 

 

2,365

 

Loss on extinguishment of debt

 

?

 

 

6,172

 

 

?

 

 

?

 

 

?

 

 

?

 

 

?

 

 

?

 

 

?

 

Business Combination integration costs (1)

 

4,379

 

 

1,887

 

 

2,586

 

 

163

 

 

716

 

 

686

 

 

483

 

 

833

 

 

381

 

Acquisition and disposition related costs (2)

 

3,429

 

 

4,074

 

 

2,118

 

 

10,632

 

 

622

 

 

815

 

 

652

 

 

1,069

 

 

1,052

 

Other (3)

 

430

 

 

56

 

 

(47

)

 

(1,158

)

 

(187

)

 

(535

)

 

1,263

 

 

(1,409

)

 

109

 

Income tax expense (benefit)

 

181

 

 

171

 

 

181

 

 

(20,074

)

 

177

 

 

177

 

 

177

 

 

(1,395

)

 

177

 

Adjusted EBITDA

$

3,035

 

$

7,175

 

$

4,388

 

$

4,535

 

$

(411

)

$

7,042

 

$

2,077

 

$

(71,759

)

$

(10,482

)

 

 

 

 

 

 

 

 

 

 

Memo:

 

 

 

 

 

 

 

 

 

De novo pre-opening costs

$

973

 

$

506

 

$

2,426

 

$

3,205

 

$

1,975

 

$

1,560

 

$

1,880

 

$

1,323

 

$

1,366

 

De novo post-opening losses

 

1,119

 

 

993

 

 

1,533

 

 

2,274

 

 

3,885

 

 

4,228

 

 

3,906

 

 

4,558

 

 

3,451

 

(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)

Mar 31, 2022

Jun 30, 2022

Sep 30, 2022

Dec 31, 2022

Mar 31, 2023

Jun 30, 2023

Sep 30, 2023

Dec 31, 2023

Mar 31, 2024

Consulting and legal fees (a)

$

3,190

$

887

$

725

$

257

 

$

282

$

237

$

69

$

451

$

371

Severance costs

 

25

 

 

252

 

 

1,080

 

 

167

 

 

11

 

 

13

 

 

?

 

 

?

 

 

?

 

Other (b)

 

1,164

 

 

748

 

 

782

 

 

(261

)

 

423

 

 

436

 

 

414

 

 

382

 

 

10

 

 

$

4,379

 

$

1,887

 

$

2,586

 

$

163

 

$

716

 

$

686

 

$

483

 

$

833

 

$

381

 

 

(a) Represents consulting and legal costs directly associated with efforts related to integration of the two privately held companies that were combined in the Business Combination.

 

(b) Represents primarily vendor expenses identified as temporary or duplicative and/or expenses outside the ordinary course of business and not necessary to run the Company's business.

 

 

(2)

Represents legal and incremental compensation payroll costs directly associated with efforts to achieve synergies related to closed transactions and legal and advisory costs related to exploration of potential dispositions. Significant components of the acquisition and disposition related costs were as follows:

 

Three Months Ended

(in thousands)

Mar 31, 2022

Jun 30, 2022

Sep 30, 2022

Dec 31, 2022

Mar 31, 2023

Jun 30, 2023

Sep 30, 2023

Dec 31, 2023

Mar 31, 2024

Advisor and other professional fees (a)

$

1,622

 

$

2,359

 

$

1,219

 

$

9,877

 

$

(258

)

$

(34

)

$

94

 

$

352

 

$

524

 

Compensation costs (b)

 

1,808

 

1,715

 

899

 

755

 

880

 

 

849

 

 

558

 

717

 

528

 

$

3,429

 

$

4,074

 

$

2,118

 

$

10,632

 

$

622

 

$

815

 

$

652

 

$

1,069

 

$

1,052

 

 

(a) Includes payments to our third-party transaction advisory firm associated with transaction contracts, including the Steward transaction that closed in November 2022. Also, costs include legal and accounting fees directly associated with contemplated or closed transactions or potential dispositions.

 

(b) Includes incremental payroll compensation expense for employees directly associated with services to achieve synergies related to closed transactions.

(3)

Components of other were as follows:

 

Three Months Ended

(in thousands)

Mar 31, 2022

Jun 30, 2022

Sep 30, 2022

Dec 31, 2022

Mar 31, 2023

Jun 30, 2023

Sep 30, 2023

Dec 31, 2023

Mar 31, 2024

Other income

$

?

 

$

?

 

$

?

 

$

(1,000

)

$

?

 

$

?

 

$

?

 

$

(874

)

$

?

 

Tax-related costs

 

265

 

 

69

 

 

(178

)

 

46

 

 

?

 

 

?

 

 

?

 

 

?

 

 

?

 

Legal settlement

 

?

 

 

(43

)

 

?

 

 

?

 

 

?

 

 

?

 

 

?

 

 

?

 

 

?

 

Interest income

 

?

 

 

?

 

 

(12

)

 

(201

)

 

(253

)

 

(602

)

 

(433

)

 

(560

)

 

(668

)

Severance costs

 

?

 

?

 

 

?

 

 

?

 

 

?

 

 

?

 

 

1,639

 

 

?

 

 

694

 

Other

 

165

 

 

29

 

 

144

 

 

(3

)

 

66

 

 

67

 

 

58

 

 

25

 

 

83

 

 

$

430

 

$

56

 

$

(47

)

$

(1,158

)

$

(187

)

$

(535

)

$

1,263

 

$

(1,409

)

$

109

 

The following metrics are as of the end of the indicated date, except for Platform Contribution, which is for the three month period ended as of the indicated date:

 

Three Months Ended

Non-GAAP Operating Metrics

Mar 31, 2022

Jun 30, 2022

Sep 30, 2022

Dec 31, 2022

Mar 31, 2023

Jun 30, 2023

Sep 30, 2023

Dec 31, 2023

Mar 31, 2024

Centers

 

48

 

 

48

 

 

51

 

 

62

 

 

62

 

 

62

 

 

62

 

 

56

 

 

55

 

Markets

 

6

 

 

6

 

 

7

 

 

7

 

 

7

 

 

7

 

 

7

 

 

7

 

 

6

 

Patients (MCREM)*

 

50,600

 

 

54,000

 

 

57,400

 

 

221,500

 

 

225,100

 

 

226,500

 

 

228,700

 

 

229,300

 

 

218,000

 

Patients in value-based care arrangements (MCREM)

 

79.8

%

 

81.0

%

 

78.2

%

 

97.6

%

 

99.0

%

 

99.4

%

 

98.8

%

 

98.8

%

 

99.1

%

Platform Contribution ($, millions)

$

17.2

 

$

21.6

 

$

20.6

 

$

25.6

 

$

24.7

 

$

28.6

 

$

21.1

 

$

(55.6

)

$

9.1

 

* MCREM defined as Medicare Equivalent Members, which assumes the level of support received by a Medicare patient is equivalent to that received by three Medicaid or Commercial patients.

 

The following table provides a reconciliation of gross profit, the most closely comparable GAAP financial measure, to Platform Contribution:

Reconciliation to Platform Contribution

Three Months Ended

(in millions)

Mar 31, 2022

 

Jun 30, 2022

 

Sep 30, 2022

 

Dec 31, 2022

 

Mar 31, 2023

 

Jun 30, 2023

 

Sep 30, 2023

 

Dec 31, 2023

Mar 31, 2024

Gross profit (a)

$

11.2

 

 

$

15.4

 

 

$

14.8

 

 

$

17.2

 

 

$

17.1

 

 

$

20.4

 

 

$

12.0

 

 

$

(63.5

)

$

1.5

 

Depreciation and amortization

 

5.1

 

 

4.9

 

 

4.6

 

 

7.2

 

 

6.6

 

 

6.8

 

 

6.8

 

 

7.6

 

 

6.7

Stock-based compensation

 

0.4

 

 

 

1.3

 

 

 

1.2

 

 

 

1.2

 

 

 

1.0

 

 

 

1.3

 

 

 

1.2

 

 

 

0.1

 

 

0.7

 

Other adjustments (b)

 

0.5

 

 

 

0.1

 

 

 

0.1

 

 

 

?

 

 

 

?

 

 

 

?

 

 

 

1.0

 

 

 

0.2

 

 

0.2

 

Platform Contribution

$

17.2

 

 

$

21.6

 

 

$

20.6

 

 

$

25.6

 

 

$

24.7

 

 

$

28.6

 

 

$

21.1

 

 

$

(55.6

)

$

9.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(a) Gross profit reflects the reclassification of stock-based compensation expense previously included in corporate, general and administrative expenses, which decreased gross profit by $0.4 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) Other adjustments include incremental costs related to post-Business Combination integration initiatives and other one-time center-level costs. Other adjustments reflected during the three months ended March 31, 2022, include $0.3 million of costs for a pilot project regarding outsourcing. During the three months ended September 30, 2023, December 31, 2023, and March 31, 2024, other adjustments include $1.0 million, $0.2 million and $0.2 million, respectively, of severance costs related to center staff.

The following table calculates the medical expense ratio:

 

Three Months Ended March 31,

(in thousands, except ratio)

2024

 

2023

External provider costs

$

180,941

 

 

$

110,673

 

Medicare and Medicaid risk-based revenue

 

206,155

 

 

 

147,219

 

Medical Expense Ratio

 

87.8

%

 

 

75.2

%

 


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