ALHAMBRA, Calif., May 27, 2020 /PRNewswire/ -- Apollo Medical
Holdings, Inc. ("ApolloMed," and together with its subsidiaries and
affiliated entities, the "Company") (NASDAQ: AMEH), an integrated
population health management company, announced today its
consolidated financial results for the first quarter ended
March 31, 2020.
"Our solid first quarter results demonstrated continued revenue
growth, further customer wins, and expansion of our membership to
1.1 million members. We began 2020 at the forefront of fighting the
COVID-19 pandemic. By maintaining our essential business
operations, ApolloMed has enabled our affiliated providers to
continue mission-critical treatment of patients to help fight the
spread of COVID-19 in our communities. The heroic work being done
by so many of our affiliated physicians and partners to help test
for, treat, and prevent COVID-19, as well as the generous donations
of medical supplies and personal protective equipment, is profound
and inspiring," stated Kenneth Sim,
M.D., Executive Chairman and Co-Chief Executive Officer of
ApolloMed.
Dr. Sim continued, "COVID-19 has provided us with an opportunity
to serve the needs of our members during a truly challenging time.
The stability of our capitation model provides adequate cash flow
and liquidity to continue the high-quality care provided to all of
our members. Our stable first quarter results provide confidence in
our ability to maintain our previously stated outlook for 2020 in
the face of the global COVID-19 pandemic."
Financial Highlights for the First Quarter Ended March 31, 2020:
- Total revenue of $165.1 million
for the quarter ended March 31, 2020,
an increase of 72% as compared to $95.8
million for the quarter ended March
31, 2019, primarily due to our acquisitions of Alpha Care
Medical Group on May 31, 2019 and
Accountable Health Care IPA on August 30,
2019, which companies contributed revenue of approximately,
$32.5 million and $12.7 million, respectively, for the quarter
ended March 31, 2020.
- Capitation revenue, net, of $140.4
million for the quarter ended March
31, 2020, an increase of 96% compared to $71.5 million for the quarter ended March 31, 2019. Capitation revenue represented
85% of our total revenue for the quarter ended March 31, 2020.
- Risk pool settlements and incentives revenue of $11.2 million for the quarter ended March 31, 2020, an increase of 11%, as compared
to $10.1 million for the quarter
ended March 31, 2019.
- Net income of $3.0 million for
the quarter ended March 31, 2020,
compared to a net loss of $2.5
million for the quarter ended March
31, 2019.
- Net income attributable to Apollo Medical Holdings, Inc. of
$4.1 million for the quarter ended
March 31, 2020, compared to net
income attributable to Apollo Medical Holdings, Inc. of
$0.1 million for the quarter ended
March 31, 2019. The increase from the
prior year was primarily due to preferred dividends ApolloMed
received from its affiliate, Allied Physicians of California IPA
("APC"), as a result of the series of transactions we completed
with APC in September 2019.
- Effective January 1, 2020, we
began providing select management services to Community Family Care
Medical Group IPA, Inc., serving approximately 145,000 members in
Southern California, which
accounted for approximately $1.7
million in management fee income for the quarter ended
March 31, 2020.
Other Information:
- The Company further announced today that Chief Technology
Officer, Brandon Sim, and Chief
Financial Officer, Eric Chin, have
been appointed as the Company's Interim Co-Chief Operating
Officers, effective May 26, 2020.
Messrs. Sim and Chin will be replacing Hing
Ang, who had served as the Company's Chief Operating Officer
for over two years. In addition to their new positions, Messrs. Sim
and Chin will remain as the Company's Chief Technology Officer and
Chief Financial Officer, respectively.
Guidance:
Our stable, subscription-based revenue model allows us to
maintain our previously disclosed 2020 guidance for total revenue
and adjusted EBITDA. We are updating our 2020 guidance for net
income and EBITDA to incorporate the impact of the sale of an
equity investment held by the Company as an excluded asset and
remained solely for the benefit of APC and its shareholders. As
such, any proceeds or gain on sale will not affect the net income
and adjusted EBITDA attributable to ApolloMed.
Our guidance for the year ending December
31, 2020, is as follows:
- Maintaining total revenue of between $665.0 million and $675.0
million,
- Adjusting net income from a range of $20.0 million and $30.0
million (disclosed on March 12,
2020) to a range of $100.0
million and $110.0
million,
- Adjusting EBITDA from a range of $55.0
million and $67.0 million
(disclosed on March 12, 2020) to a
range of $155.0 million and
$167.0 million, and
- Maintaining adjusted EBITDA of between $75.0 million and $90.0
million.
Refer to the "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. Refer to our discussion of "Forward-Looking
Statements" within this press release for additional
information.
For more details on ApolloMed's results for the quarter ended
March 31, 2020, please refer to
ApolloMed's Quarterly Report on Form 10-Q to be filed with the U.S.
Securities Exchange Commission ("SEC"), which is accessible at
www.sec.gov.
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 the date of this press release, 302,732 holdback shares
have not been issued to certain former shareholders of 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. Our 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 integrated population
health management company, which, together with its subsidiaries,
including a Next Generation Accountable Care Organization
("NGACO"), and its affiliated independent practice associations
("IPAs") and management services organizations ("MSOs"), is working
to provide coordinated, outcomes-based, high-quality medical care
for patients, particularly senior patients and patients with
multiple chronic conditions, in a cost-effective manner.
ApolloMed focuses on addressing the healthcare needs of its
patients by leveraging its integrated health management and
healthcare delivery platform that includes NMM (MSO), Apollo
Medical Management, Inc. (MSO), ApolloMed Hospitalists, a Medical
Corporation, (hospitalists), APA ACO, Inc. (NGACO), Allied
Physicians of California IPA (IPA), Alpha Care Medical
Group, Inc. (IPA), Accountable Health Care IPA (IPA) and Apollo
Care Connect, Inc. (Digital Population Health Management
Platform). 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,
2020, 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, 2019, filed
with the SEC and any subsequent quarterly reports on Form
10-Q.
FOR MORE INFORMATION, PLEASE CONTACT:
Asher Dewhurst
(443) 213-0500
asher.dewhurst@westwicke.com
APOLLO MEDICAL
HOLDINGS, INC.
|
CONSOLIDATED
BALANCE SHEETS
|
(IN THOUSANDS, EXCEPT
SHARE AND PER SHARE DATA)
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
2020
|
|
2019
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
80,892
|
|
|
$
|
103,189
|
|
Restricted
cash
|
|
75
|
|
|
75
|
|
Investment in
marketable securities
|
|
117,075
|
|
|
116,539
|
|
Receivables,
net
|
|
18,012
|
|
|
11,004
|
|
Receivables, net –
related parties
|
|
50,911
|
|
|
48,136
|
|
Other
receivables
|
|
16,362
|
|
|
16,885
|
|
Prepaid expenses and
other current assets
|
|
11,811
|
|
|
10,315
|
|
Loans
receivable
|
|
6,425
|
|
|
6,425
|
|
Loans receivable –
related parties
|
|
16,500
|
|
|
16,500
|
|
|
|
|
|
|
Total current
assets
|
|
318,063
|
|
|
329,068
|
|
|
|
|
|
|
Noncurrent
assets
|
|
|
|
|
Land, property and
equipment, net
|
|
11,876
|
|
|
12,130
|
|
Intangible assets,
net
|
|
98,840
|
|
|
103,012
|
|
Goodwill
|
|
238,539
|
|
|
238,505
|
|
Investments in other
entities – equity method
|
|
30,781
|
|
|
28,427
|
|
Investments in
privately held entities
|
|
896
|
|
|
896
|
|
Restricted
cash
|
|
746
|
|
|
746
|
|
Operating lease
right-of-use assets
|
|
18,199
|
|
|
14,248
|
|
Other
assets
|
|
6,475
|
|
|
1,681
|
|
|
|
|
|
|
Total noncurrent
assets
|
|
406,352
|
|
|
399,645
|
|
|
|
|
|
|
Total
assets
|
|
$
|
724,415
|
|
|
$
|
728,713
|
|
|
Liabilities,
Mezzanine Equity and Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts payable and
accrued expenses
|
|
$
|
20,106
|
|
|
$
|
27,279
|
|
Fiduciary accounts
payable
|
|
1,709
|
|
|
2,027
|
|
Medical
liabilities
|
|
63,698
|
|
|
58,725
|
|
Income taxes
payable
|
|
8,034
|
|
|
4,529
|
|
Dividend
payable
|
|
337
|
|
|
271
|
|
Finance lease
liabilities
|
|
102
|
|
|
102
|
|
Operating lease
liabilities
|
|
3,119
|
|
|
2,990
|
|
Current portion of
long-term debt
|
|
9,500
|
|
|
9,500
|
|
|
|
|
|
|
Total current
liabilities
|
|
106,605
|
|
|
105,423
|
|
|
|
|
|
|
Noncurrent
liabilities
|
|
|
|
|
Deferred tax
liability
|
|
16,332
|
|
|
18,269
|
|
Finance lease
liabilities, net of current portion
|
|
390
|
|
|
416
|
|
Operating lease
liabilities, net of current portion
|
|
15,583
|
|
|
11,373
|
|
Long-term debt, net
of current portion and deferred financing costs
|
|
230,105
|
|
|
232,172
|
|
|
|
|
|
|
Total noncurrent
liabilities
|
|
262,410
|
|
|
262,230
|
|
|
|
|
|
|
Total
liabilities
|
|
369,015
|
|
|
367,653
|
|
|
|
|
|
|
Mezzanine
equity
|
|
|
|
|
Noncontrolling
interest in Allied Physicians of California, a Professional Medical
Corporation
|
|
157,439
|
|
|
168,725
|
|
|
|
|
|
|
Shareholders'
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, 36,042,761 and
35,908,057 shares outstanding, excluding 17,475,707 and 17,458,810
treasury shares, at March 31, 2020, and December 31, 2019,
respectively
|
|
36
|
|
|
36
|
|
Additional paid-in
capital
|
|
161,087
|
|
|
159,608
|
|
Retained
earnings
|
|
35,957
|
|
|
31,905
|
|
|
|
197,080
|
|
|
191,549
|
|
|
|
|
|
|
Noncontrolling
interest
|
|
881
|
|
|
786
|
|
|
|
|
|
|
Total shareholders'
equity
|
|
197,961
|
|
|
192,335
|
|
|
|
|
|
|
Total liabilities,
mezzanine equity and shareholders' equity
|
|
$
|
724,415
|
|
|
$
|
728,713
|
|
APOLLO MEDICAL
HOLDINGS, INC.
|
CONSOLIDATED
STATEMENTS OF INCOME
|
(IN THOUSANDS, EXCEPT
SHARE AND PER SHARE DATA)
|
|
|
|
|
|
Three Months
Ended March
31,
|
|
|
2020
|
|
2019
|
|
|
|
|
|
Revenue
|
|
|
|
|
Capitation,
net
|
|
$
|
140,421
|
|
|
$
|
71,517
|
|
Risk pool settlements
and incentives
|
|
11,236
|
|
|
10,094
|
|
Management fee
income
|
|
8,815
|
|
|
8,997
|
|
Fee-for-service,
net
|
|
3,427
|
|
|
4,081
|
|
Other
income
|
|
1,206
|
|
|
1,069
|
|
|
|
|
|
|
Total
revenue
|
|
165,105
|
|
|
95,758
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
Cost of
services
|
|
144,204
|
|
|
83,432
|
|
General and
administrative expenses
|
|
11,834
|
|
|
10,264
|
|
Depreciation and
amortization
|
|
4,702
|
|
|
4,418
|
|
Provision for
doubtful accounts
|
|
—
|
|
|
951
|
|
|
|
|
|
|
Total
expenses
|
|
160,740
|
|
|
99,065
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
4,365
|
|
|
(3,307)
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
Income (loss) from
equity method investments
|
|
2,054
|
|
|
(850)
|
|
Interest
expense
|
|
(2,868)
|
|
|
(211)
|
|
Interest
income
|
|
929
|
|
|
323
|
|
Other
income
|
|
102
|
|
|
187
|
|
|
|
|
|
|
Total other income
(expense), net
|
|
217
|
|
|
(551)
|
|
|
|
|
|
|
Income (loss)
before provision for (benefit from) income taxes
|
|
4,582
|
|
|
(3,858)
|
|
|
|
|
|
|
Provision for
(benefit from) income taxes
|
|
1,595
|
|
|
(1,408)
|
|
|
|
|
|
|
Net income
(loss)
|
|
2,987
|
|
|
(2,450)
|
|
|
|
|
|
|
Net loss attributable
to noncontrolling interest
|
|
(1,065)
|
|
|
(2,590)
|
|
|
|
|
|
|
Net income
attributable to Apollo Medical Holdings, Inc.
|
|
$
|
4,052
|
|
|
$
|
140
|
|
|
|
|
|
|
Earnings per share
– basic
|
|
$
|
0.11
|
|
|
$
|
—
|
|
|
|
|
|
|
Earnings per share
– diluted
|
|
$
|
0.11
|
|
|
$
|
—
|
|
|
|
|
|
|
Weighted average
shares of common stock outstanding – basic
|
|
36,010,268
|
|
|
34,496,622
|
|
|
|
|
|
|
Weighted average
shares of common stock outstanding – diluted
|
|
37,439,099
|
|
|
38,074,174
|
|
APOLLO MEDICAL
HOLDINGS, INC.
|
SUPPLEMENTAL
INFORMATION
|
|
|
|
|
|
|
Capitated
Membership (in thousands)
|
|
|
|
|
|
|
March 31,
2020
|
|
December 31,
2019
|
|
December 31,
2018
|
|
|
|
|
|
|
MSO
|
514
|
|
|
421
|
|
|
665
|
|
IPA
|
543
|
|
|
530
|
|
|
265
|
|
ACO
|
30
|
|
|
29
|
|
|
30
|
|
|
|
|
|
|
|
Total lives under
management
|
1,087
|
|
|
980
|
|
|
960
|
|
Reconciliation of
Net Income to EBITDA and Adjusted EBITDA (in
thousands)
|
|
|
|
|
|
Three Months
Ended March 31,
|
|
|
2020
|
|
2019
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
2,987
|
|
|
$
|
(2,450)
|
|
Depreciation and
amortization
|
|
4,702
|
|
|
4,418
|
|
Provision for (benefit from)
income taxes
|
|
1,595
|
|
|
(1,408)
|
|
Interest expense
|
|
2,868
|
|
|
211
|
|
Interest income
|
|
(929)
|
|
|
(323)
|
|
EBITDA
|
|
11,223
|
|
|
448
|
|
|
|
|
|
|
(Income) loss from equity
method investments
|
|
(2,054)
|
|
|
850
|
|
Other income
|
|
(102)
|
|
|
(187)
|
|
Provider bonus
payments
|
|
—
|
|
|
10,000
|
|
Provision for doubtful
accounts
|
|
—
|
|
|
951
|
|
EBITDA adjustment for
recently acquired IPAs
|
|
4,760
|
|
|
—
|
|
Adjusted
EBITDA
|
|
$
|
13,827
|
|
|
$
|
12,062
|
|
Guidance
Reconciliation of Net Income to EBITDA and Adjusted EBITDA (in
thousands)
|
|
|
Year
Ending
|
|
|
December 31,
2020
|
|
|
|
|
|
Low
|
|
High
|
Net
income
|
|
$
|
100,000
|
|
|
$
|
110,000
|
|
Depreciation and
amortization
|
|
18,000
|
|
|
20,000
|
|
Provision for income
taxes
|
|
30,000
|
|
|
31,000
|
|
Interest expense
|
|
8,000
|
|
|
9,000
|
|
Interest income
|
|
(1,000)
|
|
|
(3,000)
|
|
EBITDA
|
|
155,000
|
|
|
167,000
|
|
|
|
|
|
|
Income from equity method
investments (1)
|
|
(95,000)
|
|
|
(94,000)
|
|
EBITDA adjustment for
recently acquired IPAs
|
|
15,000
|
|
|
17,000
|
|
Adjusted
EBITDA
|
|
$75,000
|
|
|
$90,000
|
|
|
(1) Income
from equity method investments is mainly attributed to the sale of
Universal Care Acquisition Partners, LLC's ("UCAP") 48.9%
investment in Universal Care, Inc. ("UCI") to Bright Health Company
of California, which closed on April 30, 2020 pursuant to the stock
purchase agreement as disclosed on the current report on form 8-K
filed on May 6, 2020. UCAP is a 100% owned subsidiary of APC and
its 48.9% investment in UCI is an excluded asset and as such
remained solely for the benefit of APC and its shareholders. As
such, any proceeds or gain on sale will not affect the net income
and adjusted EBITDA attributable to ApolloMed.
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Use of Non-GAAP Financial Measures
This press release contains the non-GAAP financial measures
earnings before interest, taxes, depreciation and amortization
("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
(loss). 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) loss from
equity method investments 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 and 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. Reconciliation between certain GAAP and
non-GAAP measures is provided above.
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SOURCE Apollo Medical Holdings, Inc.