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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): March 10, 2021

 

APOLLO MEDICAL HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware   001-37392   95-4472349
(State or Other Jurisdiction   (Commission File   (I.R.S. Employer
of Incorporation)   Number)   Identification Number)

 

1668 S. Garfield Avenue, 2nd Floor, Alhambra, CA 91801

(Address of principal executive offices) (zip code)

 

(626) 282-0288

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨Precommencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨Precommencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act: 

 

Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock AMEH Nasdaq Capital Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

 

Item 2.02 Results of Operations and Financial Condition.

 

On March 10, 2021, Apollo Medical Holdings, Inc. (the “Company”) issued a press release announcing its financial results for the quarter and year ended December 31, 2020. The Company is also making available certain supplemental data for the quarter and year ended December 31, 2020. A copy of the press release and supplemental data are attached hereto as Exhibit 99.1 and 99.2, respectively, and incorporated herein by this reference.

 

In accordance with General Instruction B.2 of Form 8-K, the information furnished pursuant to this Item 2.02, including Exhibit 99.1 and Exhibit 99.2 furnished herewith, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

 

Item 9.01 Financial Statements and Exhibits

 

(d)    Exhibits.

 

Exhibit No.   Description
99.1   Press Release of Apollo Medical Holdings, Inc., dated March 10, 2021.
99.2   Supplemental Data of Apollo Medical Holdings, Inc., dated March 10, 2021.

 

 

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  APOLLO MEDICAL HOLDINGS, INC.
   
Dated: March 10, 2021 By:  /s/ Thomas S. Lam
  Name: Thomas S. Lam, M.D., M.P.H.
  Title: Co-Chief Executive Officer and President

 

 

 

Exhibit 99.1

 

 

Apollo Medical Holdings, Inc. Reports Fourth Quarter and Year-End 2020 Results, Highlighted by Record Revenue and Net Income Growth for 2020 and Annual Guidance Beat

Company to Host Conference Call Today at 2 p.m. PT/5 p.m. ET

 

ALHAMBRA, Calif., March 10, 2021 /PRNewswire/ -- Apollo Medical Holdings, Inc. (“ApolloMed,” and together with its subsidiaries and affiliated entities, the “Company”) (NASDAQ: AMEH), a leading physician-centric, technology-powered healthcare management company, today announced its consolidated financial results for the fourth quarter and year ended December 31, 2020.

 

Financial Highlights for the Fourth Quarter and Year Ended December 31, 2020:

 

Company exceeded all previously disclosed guidance metrics for full-year 2020 (revenue, net income, EBITDA, and adjusted EBITDA)

 

Total revenue of $687.2 million for the year ended December 31, 2020, up 23% from $560.6 million for the prior year

 

Net income of $122.3 million for the year ended December 31, 2020, from $17.7 million for the prior year

 

Net income attributable to ApolloMed increased to $37.9 million for the year ended December 31, 2020, up 168% from $14.1 million for the prior year

 

Q4 total revenue of $176.8 million, compared to $178.8 million for the prior-year quarter

 

Q4 net income of $12.9 million, compared to net loss of $1.3 million for the prior-year quarter

 

Q4 net income attributable to ApolloMed of $10.1 million, up 51% from $6.7 million for the prior-year quarter

 

Cash and cash equivalents of $193.5 million at December 31, 2020

 

Recent Operating Highlights:

 

In January 2021, ApolloMed announced a strategic alliance and investment in New York-based CAIPA MSO, LLC (“CAIPA MSO”) whereby ApolloMed will own 30% of the post-closing total interests in CAIPA MSO on a fully diluted basis. With this partnership, ApolloMed will provide its proprietary technologies to CAIPA for the benefit of its physicians. The strategic alliance will provide ApolloMed with a foothold in the state of New York with the potential for expanding the alliance in the future.

 

In February 2021, ApolloMed appointed Brandon Sim as its Chief Operating Officer, pursuant to which he assumed responsibility for the Company’s overall strategy, end-to-end service delivery and all non-clinical operations. Mr. Sim will also continue in his role of Chief Technology Officer, leading all technology aspects of ApolloMed’s business, including software engineering, information technology, data management and electronic data interchange functions.

 

In March 2021, ApolloMed appointed Jeremy R. Jackson, M.D., to the newly created position of Chief of Staff. Dr. Jackson will work closely with the executive team and play a key role in special projects for ApolloMed’s technology platform, business development, strategy and operations.

 

 

 

 

Guidance:

 

ApolloMed is providing the following guidance for total revenue, net income, EBITDA, and Adjusted EBITDA, based on the Company’s existing business, current view of existing market conditions and assumptions for the year ending December 31, 2021.

 

($ in millions)  2020 Actual Results   2021 Guidance Range 
Total revenue   $687.2    $690.0 - $710.0 
Net income   $122.3 (1)    $50.0 - $60.0 
Net income attributable to ApolloMed   $37.9    $35.0 - $45.0 
EBITDA   $203.5 (1)    $95.0 - $105.0 
Adjusted EBITDA   $126.5    $115.0 - $125.0 

 

(1) 2020 net income and EBITDA include pre-tax gain on sale of a small health plan of approximately $99.6 million.

 

See “Guidance Reconciliation of Net Income to EBITDA and Adjusted EBITDA” and “Use of Non-GAAP Financial Measures” below for additional information. There can be no assurance that actual amounts will not be materially higher or lower than these expectations. See “Forward-Looking Statements” below for additional information.

 

Management Commentary:

 

Kenneth Sim, M.D., Executive Chairman and Co-Chief Executive Officer of ApolloMed, stated, “As the pandemic continues to have an impact on much of the world, our team at ApolloMed, from the front line workers to the support staff behind the scenes, remains committed to providing our member population with the quality care they have come to expect from our organization, and we are pleased to be doing our part in expediting the COVID-19 vaccination process in the geographic areas we serve. Despite the unprecedented circumstances of 2020, ApolloMed achieved record top and bottom line growth as a result of our NGACO’s phenomenal performance in 2019 and our acquisitions of Alpha Care Medical Group and Accountable Health Care IPA, a Professional Medical Corporation, in 2019. We also benefited from a trend of decreased utilization as the pandemic encouraged members to seek only essential or urgent care and from increased operational efficiencies as a direct result of our proprietary technologies.”

 

Dr. Sim continued, “Subsequent to year-end, we announced a strategic investment and alliance with CAIPA MSO in New York that we are very excited about. This partnership represents ApolloMed’s entry into the New York market and the first phase of our nationwide expansion plan. Our leadership team has been focused on profitably operating a value-based care model in the state of California for more than two decades. We believe we are well positioned with our technology-powered platform to execute on the growth opportunities we see within the space as we seek to replicate the success of our business model across the country with a goal of nearly doubling the number of managed lives by the end of 2021. In that regard, we are pleased to provide guidance for 2021 but want to note that these estimates do not account for any potential acquisitions or other major business transactions we may complete over the course of this year. As new developments that may impact guidance materialize, we are committed to remaining open and transparent and will re-evaluate and communicate any changes in guidance as appropriate.”

 

GAAP Financial Highlights for the Year Ended December 31, 2020:

 

Total revenue of $687.2 million for the year ended December 31, 2020, an increase of 23%, compared to $560.6 million for the year ended December 31, 2019, primarily due to (i) a shared savings settlement of $19.8 million earned from ApolloMed’s participation in an attribution-based risk sharing model through its NGACO, (ii) the acquisitions of Alpha Care Medical Group and Accountable Health Care IPA in 2019, which contributed an additional $52.4 million and $29.0 million in capitation revenue, respectively, and (iii) organic revenue growth at Allied Physicians of California IPA (“APC”), one of ApolloMed’s affiliated IPAs.

 

 

 

 

Capitation revenue, net, of $557.3 million for the year ended December 31, 2020, an increase of 23%, compared to $454.2 million for the year ended December 31, 2019. Capitation revenue represented 81% of total revenue for the year ended December 31, 2020.

 

Risk pool settlements and incentives revenue of $77.4 million for the year ended December 31, 2020, an increase of 51%, compared to $51.1 million for the year ended December 31, 2019, which was primarily the result of the aforementioned $19.8 million shared savings settlement.

 

Net income increased to $122.3 million for the year ended December 31, 2020, from $17.7 million for the year ended December 31, 2019. The increase from the prior year of $99.8 million was primarily due to the gain on sale of equity method investment in Universal Care, Inc.

 

Net income attributable to ApolloMed increased to $37.9 million for the year ended December 31, 2020, from $14.1 million for the year ended December 31, 2019, primarily due to an increase in preferred dividends ApolloMed received from APC as a result of an increase in APC’s earnings in 2020.

 

Earnings per share - diluted (“EPS - diluted”) increased to $1.01 per share for the year ended December 31, 2020, from $0.39 per share for the year ended December 31, 2019.

 

GAAP Financial Highlights for the Fourth Quarter Ended December 31, 2020:

 

Total revenue of $176.8 million for the quarter ended December 31, 2020, compared to $178.8 million for the quarter ended December 31, 2019.

 

Capitation revenue, net, of $140.9 million for the quarter ended December 31, 2020, compared to $148.6 million for the quarter ended December 31, 2019. The decrease was primarily driven by lower capitation revenue contributions from the Company's NGACO due to decreased utilization in the ongoing pandemic environment. Capitation revenue represented 80% of total revenue for the quarter ended December 31, 2020.

 

Risk pool settlements and incentives revenue of $23.2 million for the quarter ended December 31, 2020, an increase of 25%, compared to $18.5 million for the quarter ended December 31, 2019.

 

Net income of $12.9 million for the quarter ended December 31, 2020, compared to a net loss of $1.3 million for the quarter ended December 31, 2019.

 

Net income attributable to ApolloMed increased 51% to $10.1 million for the quarter ended December 31, 2020, from $6.7 million for the quarter ended December 31, 2019, primarily due to an increase in preferred dividends ApolloMed received from APC as a result of an increase in APC’s fourth quarter earnings.

 

EPS - diluted increased to $0.27 per share for the quarter ended December 31, 2020, from $0.18 per share for the quarter ended December 31, 2019.

 

Non-GAAP Measures for the Year Ended December 31, 2020:

 

EBITDA increased to $203.5 million for the year ended December 31, 2020, from $46.8 million for the year ended December 31, 2019.

 

Adjusted EBITDA increased to $126.5 million for the year ended December 31, 2020, from $74.5 million for the year ended December 31, 2019. The increase from the prior year was primarily due to the increases in pre-tax net income and the impact of the IPAs acquired in 2019 to increase our strategic footprint. The Company continues to work toward fully integrating the IPAs it acquired in 2019 and expects to achieve significant progress on its integration efforts in 2021.

 

Non-GAAP Measures for the Fourth Quarter Ended December 31, 2020:

 

EBITDA increased to $30.4 million for the quarter ended December 31, 2020, from $7.6 million for the quarter ended December 31, 2019.

 

 

 

 

Adjusted EBITDA increased to $35.7 million for the quarter ended December 31, 2020, from $20.9 million for the quarter ended December 31, 2019. The increase from the prior year was primarily due to the increase in pre-tax net income, specifically from increased risk pool settlements and incentives revenue and decreased cost of services as a result of the impact of COVID-19.

 

Balance Sheet Highlights:

 

As of December 31, 2020, ApolloMed’s cash and cash equivalents and investments in marketable securities increased to $261.2 million, working capital was $223.6 million, and total stockholders' equity increased to $330.9 million; from cash and cash equivalents and investments in marketable securities of $219.7 million, working capital of $223.7 million and total stockholders’ equity of $192.3 million, respectively, as of December 31, 2019.

 

See “Guidance Reconciliation of Net Income to EBITDA and Adjusted EBITDA” and “Use of Non-GAAP Financial Measures” below for additional information. There can be no assurance that actual amounts will not be materially higher or lower than these expectations. See “Forward-Looking Statements” below for additional information.

 

For more details on ApolloMed's financial results for the quarter and year ended December 31, 2020, please refer to ApolloMed's Annual Report on Form 10-K to be filed with the U.S. Securities Exchange Commission (“SEC”), which is accessible at www.sec.gov.

 

Conference Call and Webcast Information:

 

ApolloMed will host a conference call at 2 p.m. PT/5 p.m. ET today (Wednesday, March 10, 2021), during which management will discuss the results of the quarter and year ended December 31, 2020. To participate in the conference call, please use the following dial-in numbers about 5 minutes prior to the scheduled conference call time:

 

U.S. & Canada (Toll-Free): +1 (877) 407-3979
International (Toll): +1 (412) 902-0042

 

The conference call can also be accessed at: https://78449.themediaframe.com/dataconf/productusers/ameh/mediaframe/43652/indexl.html

 

An accompanying slide presentation will be made available 30 minutes prior to the start of the conference call on the “Events & Presentations” page of the Company’s website (https://apollomed.net/eventspresentation) and will be filed as an exhibit to ApolloMed's current report on Form 8-K to be filed with the SEC, accessible at www.sec.gov.

 

Those who are unable to attend the live conference call may access the recording at the above webcast link, which will be made available shortly after the conclusion of the call, or by phone using the below information:

 

Conference ID#: 13716559

Conference Call Replay: 877-660-6853 (domestic) or 201-612-7415 (international)

Expiration Date: 3/24/2021

 

Note About Consolidated Entities

 

The Company consolidates entities in which it has a controlling financial interest. The Company consolidates subsidiaries in which it holds, directly or indirectly, more than 50% of the voting rights, and variable interest entities (“VIEs”) in which the Company is the primary beneficiary. Noncontrolling interests represent third party equity ownership interests in the Company's consolidated entities (including certain VIEs). The amount of net income attributable to noncontrolling interests is disclosed in the Company's consolidated statements of income.

 

 

 

 

Note About Stockholders' Equity, Certain Treasury Stock and Earnings Per Share

 

As of December 31, 2020, 276,038 holdback shares have not been issued to certain former shareholders of the Company's subsidiary, Network Medical Management, Inc. (“NMM”), who were NMM shareholders at the time of closing of the merger, as they have yet to submit properly completed letters of transmittal to ApolloMed in order to receive their pro rata portion of ApolloMed's common stock and warrants as contemplated under that certain Agreement and Plan of Merger, dated December 21, 2016, among ApolloMed, NMM, Apollo Acquisition Corp. (“Merger Subsidiary”) and Kenneth Sim, M.D., as amended, pursuant to which Merger Subsidiary merged with and into NMM, with NMM as the surviving corporation. Pending such receipt, such former NMM shareholders have the right to receive, without interest, their pro rata share of dividends or distributions with a record date after the effectiveness of the merger. The Company's consolidated financial statements have treated such shares of common stock as outstanding, given the receipt of the letter of transmittal is considered perfunctory and ApolloMed is legally obligated to issue these shares in connection with the merger.

 

Shares of ApolloMed's common stock owned by APC, a VIE of the Company, are legally issued and outstanding but excluded from shares of common stock outstanding in the Company's consolidated financial statements, as such shares are treated as treasury shares for accounting purposes. Such shares, therefore, are not included in the number of shares of common stock outstanding used to calculate the Company's earnings per share.

 

About Apollo Medical Holdings, Inc.

 

ApolloMed is a leading physician-centric, technology-enabled healthcare management company. Leveraging its proprietary population health management and healthcare delivery platform, ApolloMed operates an integrated, value-based healthcare model, which aims to empower the providers in its network to deliver the highest quality of care to its patients in a cost-effective manner.

 

Headquartered in Alhambra, California, ApolloMed's subsidiaries include management services organizations (“MSOs”), affiliated independent practice associations (“IPAs”) and a Next Generation Accountable Care Organization (“NGACO”). NMM and Apollo Medical Management, Inc. are the administrative and managerial services companies for the affiliated physician owned professional corporations that contract with independent physicians to deliver medical services in-office and virtually under the APC, Alpha Care Medical Group and Accountable Health Care IPA brands. These affiliates are supported by ApolloMed Hospitalists, a Medical Corporation. Our NGACO operates under the APA ACO, Inc. brand and participates in the Centers for Medicare & Medicaid Services program that allows provider groups to assume higher levels of financial risk and potentially achieve a higher reward from participation in the program's attribution-based risk sharing model. For more information, please visit www.apollomed.net.

 

Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, such as statements about the Company's guidance for the year ending December 31, 2021, continued growth, acquisition strategy, ability to deliver sustainable long-term value, ability to respond to the changing environment, operational focus, strategic growth plans and merger integration efforts, as well as the impact of the COVID-19 pandemic on the Company's business, operations and financial results. Forward-looking statements reflect current views with respect to future events and financial performance and therefore cannot be guaranteed. Such statements are based on the current expectations and certain assumptions of the Company's management, and some or all of such expectations and assumptions may not materialize or may vary significantly from actual results. Actual results may also vary materially from forward-looking statements due to risks, uncertainties and other factors, known and unknown, including the risk factors described from time to time in the Company's reports to the SEC, including, without limitation the risk factors discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC and any subsequent quarterly reports on Form 10-Q.

 

FOR MORE INFORMATION, PLEASE CONTACT:

 

Investor Relations

(626) 943-6491

[email protected]

 

Carolyne Sohn, The Equity Group

(415) 568-2255

[email protected]

 

 

 

 

APOLLO MEDICAL HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

 

   December 31,   December 31, 
   2020   2019 
Assets          
           
Current assets          
Cash and cash equivalents  $193,470   $103,189 
Restricted cash       75 
Investment in marketable securities   67,695    116,539 
Receivables, net   7,058    11,004 
Receivables, net – related parties   49,260    48,136 
Other receivables   4,297    16,885 
Prepaid expenses and other current assets   16,747    10,315 
Loans receivable   50    22,925 
Total current assets  $338,577   $329,068 
           
Noncurrent assets          
Land, property and equipment, net   29,890    12,130 
Intangible assets, net   86,985    103,012 
Goodwill   239,053    238,505 
Loan receivable   480     
Loans receivable - related parties   4,145     
Investments in other entities – equity method   43,292    28,427 
Investments in privately held entities   37,075    896 
Restricted cash   500    746 
Operating lease right-of-use assets   18,574    14,248 
Other assets   18,915    1,681 
Total noncurrent assets   478,909    399,645 
Total assets(1)  $817,486   $728,713 
           
Liabilities, mezzanine equity and stockholders’ equity          
           
Current liabilities          
           
Accounts payable and accrued expenses  $36,143   $27,279 
Fiduciary accounts payable   9,642    2,027 
Medical liabilities   50,330    58,725 
Income taxes payable   4,224    4,529 
Dividend payable   485    271 
Finance lease liabilities   102    102 
Operating lease liabilities   3,177    2,991 

 

 

 

 

   December 31,
2020
   December 31,
2019
 
Current portion of long-term debt   10,889    9,500 
Total current liabilities   114,992    105,424 
           
Noncurrent liabilities          
Deferred tax liability   10,959    18,269 
Finance lease liabilities, net of current portion   311    415 
Operating lease liabilities, net of current portion   15,865    11,373 
Long-term debt, net of current portion and deferred financing costs   230,211    232,172 
Total noncurrent liabilities   257,346    262,229 
           
Total liabilities(1)   372,338    367,653 
           
Mezzanine equity          
Noncontrolling interest in Allied Physicians of California, a Professional Medical Corporation   114,237    168,725 
           
Stockholders' equity          
Series A Preferred stock, par value $0.001; 5,000,000 shares authorized (inclusive of Series B Preferred stock); 1,111,111 issued and zero outstanding        
Series B Preferred stock, par value $0.001; 5,000,000 shares authorized (inclusive of Series A Preferred stock); 555,555 issued and zero outstanding        
Common stock, $0.001 par value per share; 100,000,000 shares authorized, 42,249,137 and 35,908,057 shares outstanding, excluding 12,323,164 and 17,458,810 treasury shares, at December 31, 2020, and December 31, 2019, respectively   42    36 
Additional paid-in capital   261,011    159,608 
Retained earnings   69,771    31,905 
    330,824    191,549 
           
Noncontrolling interest   87    786 
           
Total stockholders' equity   330,911    192,335 
           
Total liabilities, mezzanine equity and stockholders' equity  $817,486   $728,713 

 

(1) The Company's consolidated balance sheets include the assets and liabilities of its consolidated variable interest entities (“VIEs”). The consolidated balance sheets include total assets that can be used only to settle obligations of the Company’s consolidated VIEs totaling $778.9 million and $849.3 million as of December 31, 2020 and December 31, 2019, respectively, and total liabilities of the Company’s consolidated VIEs for which creditors do not have recourse to the general credit of the primary beneficiary of $109.3 million and $114.5 million as of December 31, 2020 and December 31, 2019, respectively.

 

 

 

 

APOLLO MEDICAL HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF INCOME

(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

 

   Three Months Ended
December 31,
   Year Ended
 December 31,
 
   2020   2019   2020   2019 
Revenue                    
Capitation, net  $140,923   $148,620   $557,326   $454,168 
Risk pool settlements and incentives   23,212    18,458    77,367    51,098 
Management fee income   8,638    6,801    34,850    34,668 
Fee-for-service, net   3,249    3,416    12,683    15,475 
Other income   760    1,456    4,954    5,209 
                     
Total revenue   176,782    178,751    687,180    560,618 
                     
Operating expenses                    
Cost of services   137,105    151,880    539,211    467,805 
General and administrative expenses   9,456    11,451    49,116    41,482 
Depreciation and amortization   4,346    4,487    18,350    18,280 
Provision for doubtful accounts               (1,363)
Impairment of intangibles               1,994 
                     
Total expenses   150,907    167,818    606,677    528,198 
                     
Income from operations   25,875    10,933    80,503    32,420 
                     
Other income (expense)                    
Income (loss) from equity method investments   403    (8,063)   3,694    (6,901)
Interest expense   (1,492)   (3,383)   (9,499)   (4,733)
Interest income   269    718    2,813    2,024 
Gain on sale of equity method investment   193        99,839     
Other (loss) income   (437)   198    1,077    3,030 
                     
Total other (expense) income, net   (1,064)   (10,530)   97,924    (6,580)
                     
Income before provision for income taxes   24,811    403    178,427    25,840 
                     
Provision for income taxes   11,903    1,683    56,107    8,167 
                     
Net income   12,908    (1,280)   122,320    17,673 
                     
Net income attributable to noncontrolling interest   2,851    (8,007)   84,454    3,557 
                     
Net income attributable to Apollo Medical Holdings, Inc.  $10,057   $6,727   $37,866   $14,116 
                     
Earnings per share – basic  $0.28   $0.19   $1.04   $0.41 
                     
Earnings per share – diluted  $0.27   $0.18   $1.01   $0.39 

 

 

 

 

APOLLO MEDICAL HOLDINGS, INC.

SUPPLEMENTAL INFORMATION

 

Capitated Membership

 

(in thousands)  December 31,
2020
   December 31,
2019
   December 31,
2018
 
MSO   543    421    665 
IPA   558    530    265 
ACO   29    29    30 
Total lives under management   1,130    980    960 

 

Reconciliation of Net Income to EBITDA and Adjusted EBITDA

 

   Three Months Ended
December 31,
   Year Ended
 December 31,
 
(in thousands)  2020   2019   2020   2019 
Net income (loss)  $12,908   $(1,280)  $122,320   $17,673 
Depreciation and amortization   4,346    4,487    18,350    18,280 
Provision for income taxes   11,903    1,683    56,107    8,167 
Interest expense   1,492    3,383    9,499    4,733 
Interest income   (269)   (718)   (2,813)   (2,024)
EBITDA  $30,380   $7,555   $203,463   $46,829 
                     
(Income) loss from equity method investments  $(403)  $8,063   $(3,694)  $6,901 
Gain from investments – fair value adjustments   (193)       (99,839)    
Other loss (income)   437    (198)   (1,077)   (3,030)
Provider bonus payments           8,500    12,100 
Impairment of intangibles               1,994 
Provision for doubtful accounts               (1,363)
Net loss adjustment for recently acquired IPAs   5,518    5,507    19,192    11,070 
Adjusted EBITDA  $35,739   $20,927   $126,545   $74,501 

 

 

 

 

Guidance Reconciliation of Net Income to EBITDA and Adjusted EBITDA

 

   Year Ending 
   December 31, 2021 
(in thousands)  Low   High 
Net income  $50,000   $60,000 
Depreciation and amortization   17,000    17,500 
Provision for income taxes   23,000    24,000 
Interest expense   8,000    8,500 
Interest income   (3,000)   (5,000)
EBITDA   95,000    105,000 
           
Income from equity method investments   (500)   (1,000)
Provider bonus payments   6,000    6,000 
Net loss adjustment for recently acquired IPAs   14,500    15,000 
Adjusted EBITDA  $115,000   $125,000 

 

 

 

 

Use of Non-GAAP Financial Measures

 

This press release contains the non-GAAP financial measures EBITDA and adjusted EBITDA, of which the most directly comparable financial measure presented in accordance with U.S. generally accepted accounting principles (“GAAP”) is net income. These measures are not in accordance with, or alternatives to GAAP, and may be different from other non-GAAP financial measures used by other companies. The Company uses adjusted EBITDA as a supplemental performance measure of our operations, for financial and operational decision-making, and as a supplemental means of evaluating period-to-period comparisons on a consistent basis. Adjusted EBITDA is calculated as earnings before interest, taxes, depreciation and amortization, excluding income from equity method investments, provider bonuses, impairment of intangibles, provision for doubtful accounts and other income earned that are not related to the Company's normal operations. Adjusted EBITDA also excludes the effect on EBITDA of certain IPAs we recently acquired.

 

The Company believes the presentation of these non-GAAP financial measures provides investors with relevant and useful information, as it allows investors to evaluate the operating performance of the business activities without having to account for differences recognized because of non-core or non-recurring financial information. When GAAP financial measures are viewed in conjunction with non-GAAP financial measures, investors are provided with a more meaningful understanding of the Company's ongoing operating performance. In addition, these non-GAAP financial measures are among those indicators the Company uses as a basis for evaluating operational performance, allocating resources, and planning and forecasting future periods. Non-GAAP financial measures are not intended to be considered in isolation, or as a substitute for, GAAP financial measures. To the extent this release contains historical or future non-GAAP financial measures, the Company has provided corresponding GAAP financial measures for comparative purposes. The reconciliation between certain GAAP and non-GAAP measures is provided above.

 

 

 

Exhibit 99.2

 

Fourth Quarter and Year - End 2020 Earnings Call Supplement March 10, 2021 NASDAQ: AMEH

 

 

Forward - Looking Statements This presentation contains forward - looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 , Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward - looking statements include any statements about t he Company's business, financial condition, operating results, plans, objectives, expectations and intentions, expansion plans, int egration of acquired companies and any projections of earnings, revenue, EBITDA, Adjusted EBITDA or other financial items, such as the Company's projected capitation and future liquidity, and may be identified by the use of forward - looking terms such as “anticipa te,” “could,” “can,” “may,” “might,” “potential,” “predict,” “should,” “estimate,” “expect,” “project,” “believe,” “plan,” “envisi on, ” “intend,” “continue,” “target,” “seek,” “will,” “would,” and the negative of such terms, other variations on such terms or other simila r o r comparable words, phrases or terminology. Forward - looking statements reflect current views with respect to future events and financial performance and therefore cannot be guaranteed. Such statements are based on the current expectations and certain assumptions of the Company's management, and some or all of such expectations and assumptions may not materialize or may vary significantly from actual results. Actual results may also vary materially from forward - looking statements due to risks, uncerta inties and other factors, known and unknown, including the risk factors described from time to time in the Company’s reports to the U.S. Securities and Exchange Commission (the “SEC”), including without limitation the risk factors discussed in the Company's Annu al Report on Form 10 - K for the year ended December 31, 2020, and subsequent Quarterly Reports on Form 10 - Q. Because the factors referred to above could cause actual results or outcomes to differ materially from those expressed or imp lie d in any forward - looking statements, you should not place undue reliance on any such forward - looking statements. Any forward - looking statements speak only as of the date of this presentation and, unless legally required, the Company does not undertake any ob lig ation to update any forward - looking statement, as a result of new information, future events or otherwise. 2 www.apollomed.net

 

 

Company Overview Apollo Medical Holdings, Inc. (“ApolloMed”) is a leading physician - centric, technology - powered, risk - bearing healthcare management company. Leveraging its proprietary population health management and healthcare delivery platform, ApolloMed operates an integrated, value - based healthcare model, which aims to empower the providers in its network to deliver the highest quality of care to its patients in a cost - effective manner. 3 ApolloMed At - A - Glance Ticker NASDAQ: AMEH Headquarters Alhambra, California Employees (as of 12/31/2020) 630 Recent Stock Price ( as of 3/5/2021 ) $24.44 Market Cap (as of 3/5/2021) $1.3 bill ion Common Shares Outstanding 54.4 million Book Value Per Common Share $6.08 TTM Revenues $687 million 7,000+ contracted physicians 14 managed IPAs 1.1+ million managed lives 25+ years of operation Information as of 12/31/2020 unless otherwise noted www.apollomed.net

 

 

​ Company exceeded all previously disclosed guidance metrics for full - year 2020 • Revenue • Net income • EBITDA • Adj. EBITDA ​ Achieved record growth in total revenue and net income attributable to ApolloMed in 2020 ​ NGACO’s stellar performance in 2019, resulting in $19.8M shared savings settlement impact on top line, $13.3M impact on bottom line in 2020 ​ Realizing benefits from technologies implemented: >$1M in annual OpEx savings Exceeding all guidance Record growth Shared savings impact Technology at scale Q4 /Year - End and Recent Highlights ​ CAIPA MSO strategic alliance and investment — first step in executing growth strategy Strategic partnerships ​ Promotion of Brandon Sim to COO , appointment of Dr. Jeremy R. Jackson as Chief of Staff Strengthening leadership team www.apollomed.net 4

 

 

ApolloMed Proprietary Technology Platform Revenue Cycle Management • Fully configurable solution for automated medical claims processing • >80% of claims received are automatically processed; doctors are paid more quickly and more accurately, while lowering our operating costs Provider Platform • Eases revenue cycle management process across spectrum of healthcare providers • Helps providers focus on quality and patient outcomes in real - time • Uses intelligent population health analytics Care Management Platform • Integrates data and actions across spectrum of clinical and managed care administrative staff • Interoperability among systems used by all participants in managed care ecosystem • Allows for seamless and rapid scaling of value - based, managed care system www.apollomed.net 5

 

 

4,000 7,000 2017 2020 384,000 780,000 1,130,000 2014 2017 2020 CAGR: 27% $520 $561 $687 $700 2018 2019 2020 2021* 6 Historical Revenue Growth Consistent Membership Growth Contracted Physicians Growth ($ in millions) (# of physicians) CAGR: 6% * midpoint of 2021 guidance range $10.8 $14.1 $37.9 $40.0 2018 2019 2020 2021* Historical Net Income Attributable to ApolloMed Growth ($ in millions) Historical Financial Profile www.apollomed.net * midpoint of 2021 guidance range

 

 

Summary of Financial Results www.apollomed.net 7 $ in 000s except per share data Q4 2020 Q4 2019 YE 2020 YE 2019 Revenue Capitation, net $ 140,923 $ 148,620 $ 557,326 $ 454,168 Risk pool settlements and incentives 23,212 18,458 77,367 51,098 Management fee income 8,638 6,801 34,850 34,668 Fee - for - service, net 3,249 3,416 12,683 15,475 Other income 760 1,456 4,954 5,209 Total revenue 176,782 178,751 687,180 560,618 Total expenses 150,907 167,818 606,677 528,198 Income from operations 25,875 10,933 80,503 32,420 Net income (loss) 12,908 (1,280) 122,320 17,673 Net income (loss) attributable to noncontrolling interest 2,851 (8,007) 84,454 3,557 Net income attributable to ApolloMed $ 10,057 $ 6,727 $ 37,866 $ 14,116 Earnings per share – diluted $ 0.27 $ 0.18 $ 1.01 $ 0.39

 

 

Capitation - Capitated fees for medical services via direct arrangements with managed care providers . Typically pre - paid monthly based on number of enrollees Risk Pool Settlements & Incentives - Full and shared risk capitation arrangements with certain health plans , local hospitals and Next Generation Accountable Care Organizations Management Fee Income - Fees earned from providing management, physician advisory, healthcare staffing, admin istrative and other non - medical services Fee - for - service - Professional component of charges for medical services rendered by our contracted physicians at outpatient centers 0.7% 1.8% 5.1% 11.3% 81.1% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% For the year ended December 31, 2020 Capitation Risk Pool Settlements & Incentives Management Fee income Fee-for-service, net Other Income Revenue Breakdown 8 A B C D www.apollomed.net

 

 

Balance Sheet Highlights 9 $ in millions 12/31/2020 12/31/2019 $ Change % Change Cash and cash equivalents and investments in marketable securities $261.2 $219.7 $41.4 19% Working capital $223.6 $223.6 $0.1 0% Total stockholders’ equity $330.9 $192.3 $138.6 72% www.apollomed.net

 

 

Current Capitalization 10 Note: Balance sheet data as of 12 /3 1 /2020. (1) Excludes restricted cash of $61mm. www.apollomed.net (figures in millions, except per share price) Recent Share Price (as of 3/5/2021) $ 24.44 Common Shares Outstanding 54.4 Market Capitalization $ 1,329.5 Plus: Total Bank Debt 245.7 Less: Cash and Cash Equivalents (1) (132.7) Implied Enterprise Value $ 1,442.5 Notes: Availability on Revolving Credit Facility $ 16.8

 

 

2021 Guidance $ in millions YE 2020 Results 2021 Guidance Range Total Revenue $687.2 $690.0 - $710.0 Net Income $122.3 (1) $50.0 - $60.0 Net Income Attributable to ApolloMed $37.9 $35.0 - $45.0 EBITDA (2) $203.5 (1) $95.0 - $105.0 Adjusted EBITDA (2) $126.5 $115.0 - $125.0 11 (1) 2020 net income includes pre - tax gain on sale of UCI of $99.6M. (2) See “Reconciliation of Net Income to EBITDA and Adjusted EBITDA” and “Use of Non - GAAP Financial Measures” slides for more inform ation. There can be no assurance that actual amounts will not be materially higher or lower than these expectations. See “Forward - Looking Statements” on slide 2. www.apollomed.net

 

 

Reconciliation of Net Income to EBITDA and Adjusted EBITDA 12 Q4 2020 Q4 2019 YE 2020 YE 2019 Net income $ 12.9 $ (1.3) $ 122.3 $ 17.7 Depreciation and amortization 4.3 4.5 18.4 18.3 Provision for income taxes 11.9 1.7 56.1 8.1 Interest expense 1.5 3.4 9.5 4.7 Interest income (0.2) (0.7) (2.8) (2.0) EBITDA $ 30.4 $ 7.6 $ 203.5 $ 46.8 Loss (income) from equity method investments $ (0.4) $ 8.0 $ (3.7) $ 6.9 Gain on sale of equity method investment (0.2) - (99.8) - Other (income) expense 0.4 (0.2) (1.1) (3.0) Provider bonus payments - - 8.5 12.1 Impairment of intangibles - - - 2.0 Provision for doubtful accounts - - - (1.4) Net loss adjustment for recently acquired IPAs 5.5 5.5 19.1 11.1 Adjusted EBITDA $ 35.7 $ 20.9 $ 126.5 $ 74.5 ($ in millions) www.apollomed.net

 

 

TTM EBITDA Reconciliation 13 Q1 2020 Q2 2020 Q3 2020 Q4 2020 YE 2020 Net income $ 3.0 $ 81.0 $ 25.4 $ 12.9 $ 122.3 Depreciation and amortization 4.7 4.6 4.7 4.3 18.4 Provision for income taxes 1.6 31.9 10.8 11.9 56.1 Interest expense 2.9 2.7 2.5 1.5 9.5 Interest income (1.0) (0.9) (0.8) (0.2) (2.8) EBITDA $ 11.2 $ 119.3 $ 42.6 $ 30.4 $ 203.5 Income from equity method investments $ (2.1) $ (0.8) $ (0.4) $ (0.4) $ (3.7) Gain on sale of equity method investment - (99.6) - (0.2) (99.8) Other (income) expense (0.1) (1.3) (0.1) 0.4 (1.1) Provider bonus payments - 2.0 6.5 8.5 Impairment of intangibles - - - - - Provision for doubtful accounts - - - - - Net loss adjustment for recently acquired IPAs 4.8 4.1 4.8 5.5 19.1 Adjusted EBITDA $ 13.8 $ 23.7 $ 53.4 $ 35.7 $ 126.5 ($ in millions) www.apollomed.net

 

 

Guidance Reconciliation of Net Income to EBITDA and Adjusted EBITDA 14 Low High Net income $ 50.0 $ 60.0 Depreciation and amortization 17.0 17.5 Provision for income taxes 23.0 24.0 Interest expense 8.0 8.5 Interest income (3.0) (5.0) EBITDA $ 95.0 $ 105.0 Income from equity method investments $ (0.5) $ (1.0) Provider bonus payments $ 6.0 $ 6.0 Net loss adjustment for recently acquired IPAs 14.5 15.0 Adjusted EBITDA $ 115.0 $ 125.0 ($ in millions) Year Ending December 31, 2021 www.apollomed.net

 

 

Use of Non - GAAP Financial Measures This presentation contains the non - GAAP financial measures Earnings Before Interest, Taxes, Depreciation and Amortization (“EBIT DA”) and Adjusted EBITDA, of which the most directly comparable financial measure presented in accordance with GAAP is net (loss) income. These me asures are not in accordance with, or are an alternative to, U.S. generally accepted accounting principles (“GAAP”), and may be different from oth er non - GAAP financial measures used by other companies. ApolloMed uses Adjusted EBITDA as a supplemental performance measure of its operations, for f inancial and operational decision - making, and as a supplemental means of evaluating period - to - period comparisons on a consistent basis. Adjus ted EBITDA is calculated as earnings before interest, taxes, depreciation, and amortization, excluding losses from equity method investments provide b onu s payments, impairment of intangibles, provision of doubtful accounts and other income earned that is not related to ApolloMed's normal operations. Adj ust ed EBITDA also excludes non recurring items, including the effect on EBITDA of certain recently acquired IPAs. ApolloMed believes the presentation of these non - GAAP financial measures provides investors with relevant and useful information as it allows investors to evaluate the operating performance of the business activities without having to account for differences recognized because of no n - core and non - recurring financial information. When GAAP financial measures are viewed in conjunction with non - GAAP financial measures, investors are pr ovided with a more meaningful understanding of ApolloMed's ongoing operating performance. In addition, these non - GAAP financial measures are among those indicators ApolloMed uses as a basis for evaluating operational performance, allocating resources and planning and forecasting future pe rio ds. Non - GAAP financial measures are not intended to be considered in isolation, or as a substitute for, GAAP financial measures. To the extent this rel ease contains historical or future non - GAAP financial measures, ApolloMed has provided corresponding GAAP financial measures for comparative purposes. Recon ciliation between certain GAAP and non - GAAP measures is provided above. 15 www.apollomed.net

 

 

Key Acronyms 16 ◦ ACO: Accountable Care Organization ◦ AIPBP: All - Inclusive Population - Based Payments ◦ CMMI: Center for Medicare and Medicaid Innovation ◦ CMS: Centers for Medicare & Medicaid Services ◦ DME: Durable Medical Equipment ◦ Health Plan / Payors: Health Insurance Companies ◦ HMO: Health Maintenance Organization ◦ IPA: Independent Practice Association ◦ NCI: Non - Controlling Interest ◦ NMM: Network Medical Management , Inc. ◦ MSA: Master Service Agreement ◦ MSO: Management Services Organization ◦ NGACO: Next Generation Accountable Care Organization ◦ PCP: Primary Care Physician ◦ PMPM: Per Member Per Month ◦ SNF: Skilled Nursing Facility ◦ VIE: Variable Interest Entity www.apollomed.net

 

 

For inquiries, please contact: ApolloMed Investor Relations Carolyne Sohn, The Equity Group (626) 943 - 6491 (415) 568 - 2255 [email protected] [email protected] NASDAQ: AMEH www.apollomed.net 17