Apollo Medical Holdings, Inc. Reports First Quarter 2023 Results
Company to Host Conference Call on Monday, May 8, 2023, at 2:30 p.m. PT/5:30 p.m. ET
Financial Highlights for First Quarter Ended March 31, 2023:
- Total revenue of
$337.2 million 28% from$263.3 million - Net income attributable to ApolloMed of
$14.6 million 3% from$14.3 million - Earnings per share - diluted ("EPS - diluted") of
$0.31 $0.31 - Adjusted EBITDA of
$29.8 million $34.4 million - Beginning with the first quarter ended March 31, 2023, the Company is reporting its financial results based on the following three business segments, in an effort to provide greater insight into the performance of its different lines of business:
1. Care Enablement (integrated, end-to-end clinical and administrative platform comprised of technology, analytics, and management services, which enable payers and providers in the delivery of high-quality, value-based care);
2. Care Partners (partnering with high-performing providers in reducing total cost of care and participating in risk-bearing and performance-based arrangements via our consolidated risk-bearing entities, including independent physician associations ("IPAs"), health plan, and accountable care organization ("ACO")); and
3. Care Delivery (clinical operations, including primary care, multi-specialty, and ancillary services).
Recent Operating Highlights:
- On May 1, 2023, the Company completed the previously announced acquisition of
100% of the fully diluted capitalization of For Your Benefit, Inc. ("FYB"). The Company has also received approval of the change in control of FYB's license as a full-service Restricted Knox-Keene licensed health plan from the California Department of Managed Health Care. With this approval, ApolloMed is now able to assume full financial responsibility, including both professional and institutional risk, inCalifornia for the medical costs of its members/enrollees through plan-to-plan contracts with licensed health plans. - On May 5, 2023, the Company's Board of Directors approved the appointment of Chan Basho as Chief Financial Officer. Mr. Basho will remain in his role as Chief Strategy Officer and will continue to oversee the finance, operations, strategy and corporate development teams.
Management Commentary:
Brandon Sim, Co-Chief Executive Officer of ApolloMed, stated, "We began 2023 on a strong note, achieving
Mr. Sim continued, "Given our strong start to the year and ongoing execution across our business, we are pleased to be reiterating our previously provided guidance for full-year 2023. I believe that our innovative, technology-forward healthcare delivery platform, consisting of the rapidly-growing risk-bearing partnerships we have developed in conjunction with our growing clinical delivery footprint, all powered by our end-to-end care enablement suite, positions us well in our mission to accelerate the transformation of our healthcare system into one that is seamlessly coordinated, high quality, and accessible by all."
GAAP Financial Review for the First Quarter Ended March 31, 2023:
- Total revenue of
$337.2 million 28% , compared to$263.3 million - Capitation revenue, net, of
$300.2 million 35% , compared to$222.1 million 89% of total revenue for the quarter ended March 31, 2023. - Net income of
$14.3 million 19% , compared to$12.1 million - Net income attributable to ApolloMed of
$14.6 million $14.3 million - EPS - diluted of
$0.31 $0.31
Segment Results for the First Quarter Ended March 31, 2023:
Three months ended March 31, 2023 | |||||||||||||
Care | Care | Care | Other | Intersegment | Corporate | Consolidated | |||||||
Total revenues | $ 30,566 | $ 314,653 | $ 25,383 | $ 240 | $ (33,598) | $ — | $ 337,244 | ||||||
Cost of services | 15,621 | 286,078 | 21,363 | 63 | (33,728) | — | 289,397 | ||||||
General and administrative(1) | 9,199 | 6,254 | 4,986 | 660 | (1,034) | 5,409 | 25,474 | ||||||
Total expenses | 24,820 | 292,332 | 26,349 | 723 | (34,762) | 5,409 | 314,871 | ||||||
Income (loss) from operations | $ 5,746 | $ 22,321 | $ (966) | $ (483) | $ 1,164 | (2) | $ (5,409) | $ 22,373 | |||||
(1) Balance includes general and administrative expenses and depreciation and amortization. |
(2) Income from operations for the intersegment elimination represents rental income from segments renting from other segments. Rental income is presented within other income which is not presented in the table. |
Care Enablement reported total revenues of
Care Partners reported total revenue of
Care Delivery reported total revenues of
Non-GAAP Measures for the First Quarter Ended March 31, 2023:
- EBITDA of
$24.0 million $23.7 million - Adjusted EBITDA of
$29.8 million $34.4 million $6.5 million $3.0 million $10.6 million
Balance Sheet Highlights:
As of March 31, 2023, ApolloMed's cash and cash equivalents and investments in marketable securities were
Update on Share Repurchase Program
In December 2022, ApolloMed's Board of Directors approved a share repurchase plan authorizing the Company to repurchase up to
For more details on ApolloMed's financial results for the quarter ended March 31, 2023, please refer to ApolloMed's Quarterly Report on Form 10-Q to be filed with the
Guidance:
ApolloMed is reiterating the following guidance for total revenue, net income, EBITDA, Adjusted EBITDA, and EPS - diluted, based on the Company's existing business, current view of existing market conditions and assumptions for the year ending December 31, 2023.
($ in millions) | 2023 Guidance Range | ||
Low | High | ||
Total revenue | $ 1,300.0 | $ 1,500.0 | |
Net income | $ 49.5 | $ 71.5 | |
EBITDA | $ 89.5 | $ 129.5 | |
Adjusted EBITDA | $ 120.0 | $ 160.0 | |
EPS – diluted | $ 0.95 | $ 1.20 | |
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.
Conference Call and Webcast Information:
ApolloMed will host a conference call at 2:30 p.m. PT/5:30 p.m. ET today (Monday, May 8, 2023), during which management will discuss the results of the first quarter ended March 31, 2023. To participate in the conference call, please use the following dial-in numbers about 5 minutes prior to the scheduled conference call time:
International (Toll): +1 (201) 689-8517
The conference call can also be accessed via webcast at: https://event.choruscall.com/mediaframe/webcast.html?webcastid=yO0KycVd.
An accompanying slide presentation will be available in PDF format on the "IR Calendar" page of the Company's website (https://www.apollomed.net/investors/news-events/ir-calendar) after issuance of the earnings release and will be furnished 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.
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
Note About Stockholders' Equity, Certain Treasury Stock and Earnings Per Share
As of the date of this press release, 140,954 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 Allied Physicians of
About Apollo Medical Holdings, Inc.
ApolloMed is a leading physician-centric, technology-powered, risk-bearing healthcare company. Leveraging its proprietary end-to-end technology solutions, ApolloMed operates an integrated healthcare delivery platform that enables providers to successfully participate in value-based care arrangements, thus empowering them to deliver outcomes-based medical care to patients in a cost-effective manner.
Headquartered in
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements about the Company's guidance for the year ending December 31, 2023, ability to meet operational goals, ability to meet expectations in deployment of care coordination and management capabilities, ability to decrease cost of care while improving quality and outcomes, ability to deliver sustainable revenue and EBITDA growth as well as long-term value, ability to respond to the changing environment, and successful implementation of strategic growth plans, acquisition strategy, and merger integration efforts. 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, 2022, and any subsequent quarterly reports on Form 10-Q.
FOR MORE INFORMATION, PLEASE CONTACT:
Investor Relations
(626) 943-6491
investors@apollomed.net
Carolyne Sohn, The Equity Group
(408) 538-4577
csohn@equityny.com
APOLLO MEDICAL HOLDINGS, INC. | ||||
CONSOLIDATED BALANCE SHEETS | ||||
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) | ||||
March 31, | December 31, | |||
(Unaudited) | ||||
Assets | ||||
Current assets | ||||
Cash and cash equivalents | $ 274,613 | $ 288,027 | ||
Investments in marketable securities | 4,114 | 5,567 | ||
Receivables, net | 79,003 | 52,629 | ||
Receivables, net – related parties | 74,877 | 65,147 | ||
Income taxes receivable | 9 | 4,015 | ||
Other receivables | 1,929 | 1,834 | ||
Prepaid expenses and other current assets | 22,170 | 14,798 | ||
Loans receivable | 973 | 996 | ||
Loan receivable – related party | — | 2,125 | ||
Total current assets | 457,688 | 435,138 | ||
Non-current assets | ||||
Land, property, and equipment, net | 113,361 | 108,536 | ||
Intangible assets, net | 77,675 | 76,861 | ||
Goodwill | 276,028 | 275,675 | ||
Investments in other entities – equity method | 43,108 | 40,299 | ||
Investments in privately held entities | 896 | 896 | ||
Operating lease right-of-use assets | 18,431 | 20,444 | ||
Other assets | 5,441 | 6,056 | ||
Total non-current assets | 534,940 | 528,767 | ||
Total assets(1) | $ 992,628 | $ 963,905 | ||
Liabilities, mezzanine equity and stockholders' equity | ||||
Current liabilities | ||||
Accounts payable and accrued expenses | $ 49,486 | $ 49,562 | ||
Fiduciary accounts payable | 8,976 | 8,065 | ||
Medical liabilities | 101,394 | 84,253 | ||
Dividend payable | 664 | 664 | ||
Finance lease liabilities | 579 | 594 | ||
Operating lease liabilities | 3,234 | 3,572 | ||
Current portion of long-term debt | 621 | 619 | ||
Total current liabilities | 164,954 | 147,329 | ||
Non-current liabilities | ||||
Deferred tax liability | 3,695 | 3,042 | ||
Finance lease liabilities, net of current portion | 1,136 | 1,275 | ||
Operating lease liabilities, net of current portion | 18,164 | 19,915 | ||
Long-term debt, net of current portion and deferred financing costs | 204,944 | 203,389 | ||
Other long-term liabilities | 21,806 | 20,260 | ||
Total non-current liabilities | 249,745 | 247,881 | ||
Total liabilities(1) | 414,699 | 395,210 | ||
Mezzanine equity | ||||
Non-controlling interest in Allied Physicians of | 14,729 | 13,682 | ||
Stockholders' equity | ||||
Series A Preferred stock, par value | — | — | ||
Series B Preferred stock, par value | — | — | ||
Common stock, | 47 | 47 | ||
Additional paid-in capital | 352,697 | 360,097 | ||
Retained earnings | 207,300 | 192,678 | ||
Total stockholders' equity | 560,044 | 552,822 | ||
Non-controlling interest | 3,156 | 2,191 | ||
Total equity | 563,200 | 555,013 | ||
Total liabilities, mezzanine equity and stockholders' equity | $ 992,628 | $ 963,905 | ||
(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 |
APOLLO MEDICAL HOLDINGS, INC. | ||||
CONSOLIDATED STATEMENTS OF OPERATIONS | ||||
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) | ||||
(UNAUDITED) | ||||
Three Months Ended March 31, | ||||
2023 | 2022 | |||
Revenue | ||||
Capitation, net | $ 300,204 | $ 222,060 | ||
Risk pool settlements and incentives | 13,462 | 18,075 | ||
Management fee income | 9,896 | 10,473 | ||
Fee-for-service, net | 12,062 | 11,095 | ||
Other income | 1,620 | 1,555 | ||
Total revenue | 337,244 | 263,258 | ||
Operating expenses | ||||
Cost of services, excluding depreciation and amortization | 289,397 | 220,730 | ||
General and administrative expenses | 21,182 | 11,943 | ||
Depreciation and amortization | 4,292 | 4,374 | ||
Total expenses | 314,871 | 237,047 | ||
Income from operations | 22,373 | 26,211 | ||
Other (expense) income | ||||
Income from equity method investments | 2,484 | 1,433 | ||
Interest expense | (3,269) | (1,073) | ||
Interest income | 3,009 | 46 | ||
Unrealized loss on investments | (6,392) | (8,962) | ||
Other income | 1,204 | 613 | ||
Total other expense, net | (2,964) | (7,943) | ||
Income before provision for income taxes | 19,409 | 18,268 | ||
Provision for income taxes | 5,102 | 6,195 | ||
Net income | 14,307 | 12,073 | ||
Net loss attributable to non-controlling interest | (315) | (2,191) | ||
Net income attributable to Apollo Medical Holdings, Inc. | $ 14,622 | $ 14,264 | ||
Earnings per share – basic | $ 0.31 | $ 0.32 | ||
Earnings per share – diluted | $ 0.31 | $ 0.31 | ||
Reconciliation of Net Income to EBITDA and Adjusted EBITDA | |||||
Three Months Ended March 31, | |||||
(in thousands) | 2023 | 2022 | |||
Net income | $ 14,307 | $ 12,073 | |||
Interest expense | 3,269 | 1,073 | |||
Interest income | (3,009) | (46) | |||
Provision for income taxes | 5,102 | 6,195 | |||
Depreciation and amortization | 4,292 | 4,374 | |||
EBITDA | 23,961 | 23,669 | |||
Income from equity method investments | (249) | (148) | |||
Other, net | 1,402 | (1) | — | ||
Stock-based compensation | 3,445 | 3,055 | |||
APC excluded assets costs | 1,266 | 7,784 | |||
Adjusted EBITDA | $ 29,825 | $ 34,360 | (2) | ||
(1) Other, net for the three months ended March 31, 2023 relates to changes in the fair value of our financing obligation to purchase the remaining equity interest in one of our investments. |
(2) Adjusted EBITDA under the historical method for the three months ended March 31, 2022 was |
Guidance Reconciliation of Net Income to EBITDA and Adjusted EBITDA | |||
2023 Guidance Range | |||
(in thousands) | Low | High | |
Net income | $ 49,500 | $ 71,500 | |
Interest expense | 1,000 | 1,000 | |
Provision for income taxes | 23,000 | 38,000 | |
Depreciation and amortization | 16,000 | 19,000 | |
EBITDA | 89,500 | 129,500 | |
Loss (income) from equity method investments | (750) | (750) | |
Other, net | 3,250 | 3,250 | |
Stock-based compensation | 16,000 | 16,000 | |
APC excluded assets costs | 12,000 | 12,000 | |
Adjusted EBITDA | $ 120,000 | $ 160,000 | |
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
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.
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SOURCE Apollo Medical Holdings, Inc.
