CareMax Reports Fourth Quarter and Full Year 2023 Results

3/18/24 6:55:00 AM ET

Hospital/Nursing Management

Health Care

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Met 2023 Guidance for Medicare Advantage Membership and Total Revenue
Year-end 2023 Medicare Advantage Membership of 111,500, up 19% year-over-year
Full Year 2023 Total Revenue of $751.1 million, up 19% year-over-year
Exploring Strategic Options to Maximize Value of Certain Assets and Generate Further Liquidity

CareMax, Inc. (NASDAQ:CMAX, CMAXW))) ("CareMax" or the "Company"), a leading technology-enabled value-based care delivery system, today announced financial results for the fourth quarter and full year ended December 31, 2023.

"In the fourth quarter, we began taking major steps with the goal of solidifying the long-term viability of our business," said Carlos de Solo, Chief Executive Officer. "We have made difficult but necessary decisions to de-emphasize certain longer duration investments, such as de novo centers, and to refocus efforts on driving medical margin within our core centers and management services organization while implementing cost saving initiatives across the organization. Our lenders have also granted us limited waivers of certain financial covenants in our credit facility in the short term to help provide us with flexibility as we explore strategic options across our lines of business to maximize the value of certain assets. In short, we are taking the actions we believe are necessary to reposition CareMax for future success."

Mr. de Solo continued, "What has not changed is our commitment to clinical excellence. Having achieved a 5-Star quality rating across our centers for the third consecutive year, CareMax remains at the forefront of enabling physicians to succeed under value-based care. We thank our team members for their dedication to our mission and for upholding the high standards of care our organization was founded upon."

Fourth Quarter 2023 Results

Total membership of 270,000, up 4% year-over-year.
Medicare Advantage membership of 111,500, up 19% year-over-year.
Total revenue was $151.8 million, down 8% year-over-year.
Net loss was $465.8 million, including $369.2 million of non-cash goodwill impairment, compared to net income of $10.4 million for the fourth quarter of 2022, which included a $76.3 million non-cash gain on remeasurement of contingent earnout liabilities and a $20.1 million non-cash income tax benefit, partially offset by a $70.0 million non-cash goodwill impairment.
Adjusted EBITDA was ($71.8) million, compared to $4.5 million for the fourth quarter of 2022.¹
Platform Contribution was ($55.6) million, compared to $25.6 million for the fourth quarter of 2022.¹
Medical Expense Ratio was 122.7%, compared to 69.5% for the fourth quarter of 2022, primarily due to the impacts of prior period developments and a provision for adverse deviation.
De novo pre-opening costs and post-opening losses for the fourth quarter of 2023 were $5.9 million.²

Full Year 2023 Results

Total revenue was $751.1 million, up 19% year-over-year.
Medical Expense Ratio was 91.5%, compared to 72.7% for the year ended December 31, 2022.
Net loss was $683.3 million, including $547.2 million of non-cash goodwill impairment, compared to net loss of $37.8 million for the year ended December 31, 2022, which included a $76.3 million non-cash gain on remeasurement of contingent earnout liabilities and a $19.5 million non-cash income tax benefit, partially offset by a $70.0 million non-cash goodwill impairment.
Adjusted EBITDA was ($63.1) million for the year ended December 31, 2023 and $19.1 million for the year ended December 31, 2022.¹
Platform Contribution was $18.8 million, compared to $85.1 for the year ended December 31, 2022.¹

Forward-Looking Commentary for Full Year 2024

CareMax is in the process of exploring strategic options across its business to maximize the value of certain of its assets and help generate further liquidity. While management believes that these efforts will result in financial benefits to the Company, the exact impacts of the outcomes of these processes on the Company's financial performance are uncertain. Accordingly, the Company is not providing a 2024 financial outlook at this time.

¹Adjusted 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.

²De 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.

Conference Call Details

Management will host a conference call at 8:30 AM ET today to discuss the results. The conference call can be accessed by dialing (888) 330-2508 for U.S. participants, or (240) 789-2735 for international participants, and referencing conference ID 7874605. A live audio webcast will also be available on the "Events & Presentations" section of CareMax's investor relations website at ir.caremax.com. Following the live call, a replay will be available on the Company's website.

About CareMax

Founded in 2011, CareMax is a value-based care delivery system that utilizes a proprietary technology-enabled platform and multi-specialty, whole person health model to deliver comprehensive, preventative and coordinated care for its members. With over 200,000 Medicare Value-Based Care Members across 10 states, and fully integrated, Five-Star Quality rated health and wellness centers, CareMax is redefining healthcare across the country by reducing costs, improving overall outcomes and promoting health equity for seniors. Learn more at www.caremax.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995, as amended. These forward-looking statements include statements regarding our future growth, strategy and financial performance. Words such as "anticipate," "believe," "budget," "contemplate," "continue," "could," "envision," "estimate," "expect," "guidance," "indicate," "intend," "may," "might," "plan," "possibly," "potential," "predict," "probably," "pro forma," "project," "seek," "should," "target," or "will," or the negative or other variations thereof, and similar words or phrases or comparable terminology, are intended to identify forward-looking statements. These forward-looking statements reflect the Company's expectations, plans or forecasts of future events and views as of the date of this press release. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company's control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements.

Important risks and uncertainties that could cause the Company's actual results and financial condition to differ materially from those indicated in forward-looking statements include, among others, the Company's 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. CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share data) (Unaudited)

	December 31, 2023			December 31, 2022
ASSETS

Current Assets
Cash and cash equivalents	$	65,528		$	41,626
Accounts receivable, net		114,754			151,743
Other current assets		3,066			3,968
Total Current Assets		183,348			197,336

Property and equipment, net		47,918			21,006
Operating lease right-of-use assets		109,215			108,937
Goodwill, net		156,841			700,643
Intangible assets, net		101,243			123,585
Deferred debt issuance costs		—			1,685
Other assets		24,737			17,550
Total Assets	$	623,301		$	1,170,743

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities
Accounts payable	$	6,275		$	7,687
Accrued expenses		16,224			16,854
Risk settlement liabilities		42,602			14,171
Related party liabilities		190			1,777
Related party debt, net		—			30,277
Current portion of third-party debt, net		364,380			253
Current portion of operating lease liabilities		8,975			5,512
Other current liabilities		165			790
Total Current Liabilities		438,812			77,322
Derivative warrant liabilities		22			3,974
Long-term debt, net		21,443			230,725
Long-term operating lease liabilities		97,136			96,539
Contingent earnout liability		—			134,561
Other liabilities		4,443			8,075
Total Liabilities		561,856			551,196
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock (1,000,000 shares authorized; one share issued and outstanding as of December 31, 2023 and December 31, 2022)		—			—
Class A common stock ($0.0001 par value; 8,333,333 shares authorized; 3,744,732 and 3,711,086 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively)¹		11			11
Additional paid-in-capital		782,371			657,126
Accumulated deficit		(720,938	)		(37,590	)
Total Stockholders' Equity		61,444			619,547

Total Liabilities and Stockholders' Equity	$	623,301		$	1,170,743

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

CAREMAX, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share data) (Unaudited)

	Three Months Ended December 31,						Years Ended December 31,
	2023			2022			2023			2022
Revenue
Medicare risk-based revenue	$	108,650		$	113,041		$	519,834		$	486,718
Medicaid risk-based revenue		26,263			36,620			105,893			96,534
Government value-based care revenue		7,425			6,389			67,708			6,389
Other revenue		9,497			8,213			57,667			41,492
Total revenue		151,835			164,263			751,102			631,132

Operating expenses
External provider costs		165,522			104,078			572,329			424,182
Cost of care		42,226			38,723			164,872			126,648
Sales and marketing		3,681			3,806			14,274			11,761
Corporate, general and administrative		16,662			17,096			80,684			75,824
Depreciation and amortization		7,550			7,180			27,787			21,719
Goodwill impairment		369,200			70,000			547,200			70,000
Acquisition related costs		—			9,616			108			13,165
Total operating expenses		604,841			250,498			1,407,254			743,297
Operating loss		(453,006	)		(86,235	)		(656,152	)		(112,165	)
Nonoperating income (expense)
Interest expense		(16,526	)		(8,743	)		(54,434	)		(20,455	)
Change in fair value of derivative warrant liabilities		961			7,877			3,952			4,401
Gain on remeasurement of contingent earnout liabilities		—			76,295			19,916			76,295
Loss on extinguishment of debt		—			—			—			(6,172	)
Other income, net		1,410			1,168			2,507			759
		(14,155	)		76,597			(28,059	)		54,828
Loss before income tax		(467,162	)		(9,640	)		(684,211	)		(57,337	)
Income tax benefit		(1,395	)		(20,074	)		(863	)		(19,542	)
Net (loss) income	$	(465,766	)	$	10,434		$	(683,348	)	$	(37,796	)

Weighted-average basic shares outstanding¹		3,740,304			3,362,890			3,727,725			3,026,644
Net (loss) income per share
Basic	$	(124.53	)	$	3.10		$	(183.31	)	$	(12.49	)

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

CAREMAX, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (Unaudited)

	Years Ended December 31,
	2023			2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(683,348	)	$	(37,796	)
Adjustments to reconcile net loss to cash and cash equivalents:
Depreciation and amortization expense		27,787			21,719
Amortization of debt issuance costs and discounts		8,314			2,382
Stock-based compensation expense		10,599			10,271
Income tax benefit		(863	)		(19,542	)
Change in fair value of derivative warrant liabilities		(3,952	)		(4,401	)
Gain on remeasurement of contingent earnout liabilities		(19,916	)		(76,295	)
Loss on extinguishment of debt		—			6,172
Payment-in-kind interest expense		12,064			5,277
Non-cash finance lease expense		419			—
Provision for credit losses		(1,588	)		1,243
Goodwill impairment		547,200			70,000
Amortization of right-of-use assets		11,527			—
Other non-cash, net		1,488			853
Changes in operating assets and liabilities:
Accounts receivable		25,941			(66,561	)
Other current assets		902			2,505
Risk settlement liabilities		32,560			6,775
Other assets		(6,501	)		(3,127	)
Operating lease liabilities		(5,897	)		4,386
Accounts payable		413			1,730
Accrued expenses		(2,601	)		4,722
Related party liabilities		(1,069	)		—
Other liabilities		(393	)		1,470
Net cash used in operating activities		(46,913	)		(68,216	)

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment		(14,611	)		(7,450	)
Return of cash held in escrow		—			785
Acquisition of businesses, net of cash acquired		—			(55,837	)
Net cash used in investing activities		(14,611	)		(62,502	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings		122,000			229,241
Proceeds from related party borrowings		—			29,876
Principal payments of related party debt		(35,510	)		(121,977	)
Principal payments of third-party debt		(253	)		—
Payments of debt issuance costs		(810	)		(7,272	)
Collateral for letters of credit		—			(5,439	)
Net cash provided by financing activities		85,427			124,428

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		23,903			(6,290	)
Cash and cash equivalents - beginning of period		41,626			47,917
CASH AND CASH EQUIVALENTS - END OF PERIOD	$	65,528		$	41,626

Non-GAAP Financial Summary
(Unaudited)	Three Months Ended
(in thousands)	Dec 31, 2021			Mar 31, 2022			Jun 30, 2022			Sep 30, 2022			Dec 31, 2022			Mar 31, 2023			Jun 30, 2023			Sep 30, 2023			Dec 31, 2023
Medicare risk-based revenue	$	91,277		$	107,747		$	143,664		$	122,267		$	113,041		$	121,593		$	155,486		$	134,105		$	108,650
Medicaid risk-based revenue		20,160			20,165			19,896			19,852			36,620			25,626			30,054			23,950			26,263
Government value-based care revenue		—			—			—			—			6,389			10,010			22,206			28,067			7,425
Other revenue		6,869			9,008			8,719			15,551			8,213			15,754			16,694			15,721			9,497
Total revenue		118,306			136,920			172,279			157,670			164,263			172,983			224,440			201,843			151,835

External provider costs		79,724			92,856			120,348			106,900			104,078			110,673			156,995			139,139			165,522
Cost of care		22,606			26,854			30,293			30,150			34,581			37,627			38,865			41,599			41,915
Platform contribution		15,977			17,210			21,638			20,620			25,604			24,683			28,580			21,106			(55,602	)
Platform contribution margin (%)		13.5	%		12.6	%		12.6	%		13.1	%		15.6	%		14.3	%		12.7	%		10.5	%		(36.6	%)

Sales and marketing		2,615			3,301			2,299			2,355			3,806			3,765			3,381			3,501			3,627
Corporate, general and administrative		11,228			10,873			12,165			13,877			17,263			21,329			18,158			15,527			12,531
Adjusted operating expenses		13,843			14,174			14,464			16,232			21,069			25,094			21,539			19,028			16,158

Adjusted EBITDA	$	2,134		$	3,035		$	7,175		$	4,388		$	4,535		$	(411	)	$	7,042		$	2,077		$	(71,759	)

Reconciliation to Adjusted EBITDA	Three Months Ended
(in thousands)	Dec 31, 2021			Mar 31, 2022			Jun 30, 2022			Sep 30, 2022			Dec 31, 2022			Mar 31, 2023			Jun 30, 2023			Sep 30, 2023			Dec 31, 2023
Net loss	$	(3,553	)	$	(16,797	)	$	(9,381	)	$	(22,053	)	$	10,434		$	(82,082	)	$	(32,376	)	$	(103,123	)	$	(465,766	)
Interest expense		1,905			1,728			3,896			6,088			8,743			10,711			13,197			14,000			16,526
Depreciation and amortization		6,089			5,062			4,903			4,573			7,180			6,576			6,828			6,833			7,550
Remeasurement of warrant and contingent earnout liabilities		(8,734	)		3,536			(7,391	)		7,331			(84,171	)		(37,242	)		15,786			(1,450	)		(961	)
Goodwill impairment		—			—			—			—			70,000			98,000			—			80,000			369,200
Stock-based compensation		375			1,087			2,788			3,611			2,786			2,298			2,464			3,243			2,595
Loss on extinguishment of debt		7			—			6,172			—			—			—			—			—			—
Business Combination integration costs⁽¹⁾		2,277			4,379			1,887			2,586			163			716			686			483			833
Acquisition and integration related costs⁽²⁾		2,325			3,429			4,074			2,118			10,632			622			815			652			1,069
DeSpac costs		742			9			10			11			10			—			—			—			—
Other⁽³⁾		543			421			46			(58	)		(1,168	)		(187	)		(535	)		1,263			(1,409	)
Income tax provision (benefit)		159			181			171			181			(20,074	)		177			177			177			(1,395	)
Adjusted EBITDA	$	2,134		$	3,035		$	7,175		$	4,388		$	4,535		$	(411	)	$	7,042		$	2,077		$	(71,759	)

Memo:
De novo pre-opening costs	$	806		$	973		$	506		$	2,426		$	3,205		$	1,975		$	1,560		$	1,880		$	1,323
De novo post-opening losses		489			1,119			993			1,533			2,274			3,885			4,228			3,906			4,558

(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)	Dec 31, 2021			Mar 31, 2022		Jun 30, 2022		Sep 30, 2022		Dec 31, 2022			Mar 31, 2023		Jun 30, 2023		Sep 30, 2023		Dec 31, 2023
Consulting and legal fees (a)	$	1,639		$	3,190	$	887	$	725	$	257		$	282	$	237	$	69	$	451
Severance costs		949			25		252		1,080		167			11		13		—		—
Other (b)		(311	)		1,164		748		782		(261	)		423		436		414		382
	$	2,277		$	4,379	$	1,887	$	2,586	$	163		$	716	$	686	$	483	$	833

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

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

(2)

Includes all costs recognized in acquisition related costs in our condensed consolidated statements of operations and incremental payroll compensation expense for employees directly associated with services to achieve synergies related to closed transactions. Significant components of acquisition and integration related costs were as follows:

	Three Months Ended
(in thousands)	Dec 31, 2021		Mar 31, 2022		Jun 30, 2022		Sep 30, 2022		Dec 31, 2022		Mar 31, 2023			Jun 30, 2023			Sep 30, 2023		Dec 31, 2023
Advisor and other professional fees (a)	$	1,183	$	1,622	$	2,359	$	1,219	$	9,877	$	(258	)	$	(34	)	$	94	$	352
Compensation costs (b)		1,142		1,808		1,715		899		755		880			849			558		717
	$	2,325	$	3,429	$	4,074	$	2,118	$	10,632	$	622		$	815		$	652	$	1,069

(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.

(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)	Dec 31, 2021		Mar 31, 2022		Jun 30, 2022			Sep 30, 2022			Dec 31, 2022			Mar 31, 2023			Jun 30, 2023			Sep 30, 2023			Dec 31, 2023
Other income	$	—	$	—	$	—		$	—		$	(1,000	)	$	—		$	—		$	—		$	(874	)
Tax-related costs		95		265		69			(178	)		46			—			—			—			—
Legal settlement		229		—		(43	)		—			—			—			—			—			—
Interest income		—		—		—			(12	)		(201	)		(253	)		(602	)		(433	)		(560	)
Severance costs		—		—		—			—			—			—			—			1,639			—
Other		219		156		19			133			(13	)		66			67			58			25
	$	543	$	421	$	46		$	(58	)	$	(1,168	)	$	(187	)	$	(535	)	$	1,263		$	(1,409	)


Non-GAAP Operating Metrics	Dec 31, 2021			Mar 31, 2022			Jun 30, 2022			Sep 30, 2022			Dec 31, 2022			Mar 31, 2023			Jun 30, 2023			Sep 30, 2023			Dec 31, 2023
Centers		45			48			48			51			62			62			62			62			56
Markets		4			6			6			7			7			7			7			7			7
Patients (MCREM)*		50,100			50,600			54,000			57,400			221,500			225,100			226,500			228,700			229,300
Patients in value-based care arrangements (MCREM)		79.3	%		79.8	%		81.0	%		78.2	%		97.6	%		99.0	%		99.4	%		98.8	%		98.8	%
Platform Contribution ($, millions)	$	16.0		$	17.2		$	21.6		$	20.6		$	25.6		$	24.7		$	28.6		$	21.1		$	(55.6	)
* MCREM defined as Medicare Equivalent Members, which assumes the level of support received by a Medicare patient is equivalent to that received by three Medicaid or Commercial patients.

Reconciliation to Platform Contribution

(in millions)	Dec 31, 2021		Mar 31, 2022		Jun 30, 2022		Sep 30, 2022		Dec 31, 2022		Mar 31, 2023		Jun 30, 2023		Sep 30, 2023		Dec 31, 2023
Gross profit (a)	$	9.6	$	11.2	$	15.4	$	14.8	$	17.2	$	17.1	$	20.4	$	12.0	$	(63.5	)
Depreciation and amortization		6.1		5.1		4.9		4.6		7.2		6.6		6.8		6.8		7.6
Stock-based compensation		0.1		0.4		1.3		1.2		1.2		1.0		1.3		1.2		0.1
Other adjustments (b)		0.2		0.5		0.1		0.1		—		—		—		1.0		0.2
Platform Contribution	$	16.0	$	17.2	$	21.6	$	20.6	$	25.6	$	24.7	$	28.6	$	21.1	$	(55.6	)

(a) Gross profit reflects the reclassification of stock-based compensation expense previously included in corporate, general and administrative expenses, which decreased gross profit by $0.1 million during the three months ended December 31, 2021, $0.4 million during the three months ended March 31, 2022, $1.3 million during the three months ended June 30, 2022, $1.2 million during the three months ended September 30, 2022, and $1.2 million during the three months ended December 31, 2022.
(b) 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 and December 31, 2023, other adjustments include $1.0 million and $0.2 million, respectively, of severance costs related to center staff.

Calculation of the Medical Expense Ratio

	Three Months Ended December 31,						Years Ended December 31,
(in thousands, except ratio)	2023			2022			2023			2022
External provider costs	$	165,522		$	104,078		$	572,329		$	424,182
Medicare and Medicaid risk-based revenue		134,913			149,661			625,727			583,252
Medical Expense Ratio		122.7	%		69.5	%		91.5	%		72.7	%

View source version on businesswire.com: https://www.businesswire.com/news/home/20240318654271/en/

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Date	Price Target	Rating	Analyst
2/26/2024	$1.50 → $7.50	Buy → Hold	Jefferies
11/17/2023	$5.00 → $1.00	Buy → Neutral	UBS
11/10/2023	$3.00 → $2.00	Overweight → Neutral	Piper Sandler
3/17/2023	$7.00 → $4.00	Outperform → Market Perform	TD Cowen
9/7/2022	$7.50	Hold	Truist
1/7/2022	$14.00	Buy	UBS
10/20/2021	$15.00	Buy	Jefferies
9/13/2021	$14.00	Neutral → Overweight	Piper Sandler

CareMax Reports Fourth Quarter and Full Year 2023 Results

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