ALHAMBRA, Calif., Aug. 7, 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 second quarter ended
June 30, 2020.
"We built upon the strong momentum we generated from early in
the year and carried it into the second quarter, culminating in
strong growth in revenue and net income attributable to the
company. Our focus on fighting the pandemic remained at the
forefront of our efforts in the quarter, during which we expanded
our testing capacity and maintained focus on sustaining our
essential business operations that empower our affiliated providers
to care for patients and to help quell COVID-19 in our
communities," stated Kenneth Sim,
M.D., Executive Chairman and Co-Chief Executive Officer of
ApolloMed.
Dr. Sim continued, "The further investments we've made in our
advanced technologies and software will shape the future of our
organization, while preserving the cutting-edge nature of our
solution and ensuring the scalability required to support our
growing membership base. As we close out a strong first half of
2020, we are well positioned to capitalize on ever changing
industry dynamics and we are confident in our ability to deliver on
our full year guidance."
Financial Highlights for the Second Quarter Ended
June 30, 2020:
- Total revenue of $165.2 million
for the quarter ended June 30, 2020,
an increase of 27% as compared to $130.1
million for the quarter ended June
30, 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 $12.5 million, respectively, for the quarter
ended June 30, 2020.
- Capitation revenue, net, of $140.9
million for the quarter ended June
30, 2020, an increase of 37% compared to $103.2 million for the quarter ended June 30, 2019. Capitation revenue represented 85%
of our total revenue for the quarter ended June 30, 2020.
- Risk pool settlements and incentives revenue of $12.0 million for the quarter ended June 30, 2020, an increase of 7%, as compared to
$11.2 million for the quarter ended
June 30, 2019.
- Net income of $81.0 million for
the quarter ended June 30, 2020 as
compared to net income of $10.7
million for the quarter ended June
30, 2019 driven primarily by the gain on the sale by
Universal Care Acquisition Partners, LLC's ("UCAP") of its 48.9%
investment in Universal Care, Inc. ("UCI") to Bright Health Company
of California ("Bright"). UCAP is
a 100% owned subsidiary of ApolloMed's affiliate, Allied Physicians
of California IPA ("APC") and its 48.9% investment in UCI is an
excluded asset that remains solely for the benefit of APC and its
shareholders. As such, the gain on sale did not affect the net
income and adjusted EBITDA attributable to ApolloMed.
- Net income attributable to Apollo Medical Holdings, Inc. of
$7.0 million for the quarter ended
June 30, 2020, as compared to net
income attributable to Apollo Medical Holdings, Inc. of
$3.5 million for the quarter ended
June 30, 2019. The increase from the
prior year was primarily due to preferred dividends ApolloMed
received from APC.
Guidance:
The Company's stable, subscription-based revenue model allows it
to maintain its previously disclosed 2020 guidance for total
revenue, net income, EBITDA and adjusted EBITDA. Net income and
EBITDA include the impact of the gain of approximately $99.6 million related to the sale of UCAP's 48.9%
investment in UCI to Bright, which closed on April 30, 2020. As UCI was an excluded asset and
remained solely for the benefit of APC and its shareholders, the
gain on sale did not affect the net income and adjusted EBITDA
attributable to ApolloMed.
The Company's guidance for the year ending December 31, 2020, is as follows:
- Maintain total revenue of between $665.0
million and $675.0
million,
- Maintain net income of between $100.0
million and $110.0
million,
- Maintain EBITDA of between $155.0
million and $167.0 million,
and
- Maintain 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 financial results for the
quarter ended June 30, 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 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 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 2019
Novel Coronavirus (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)
|
|
|
|
|
|
|
|
June
30,
|
|
December
31,
|
|
|
2020
|
|
2019
|
|
|
|
|
|
Assets
|
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
152,441
|
|
|
$
|
103,189
|
|
Restricted
cash
|
|
—
|
|
|
75
|
|
Investment in
marketable securities
|
|
117,656
|
|
|
116,539
|
|
Receivables,
net
|
|
17,588
|
|
|
11,004
|
|
Receivables, net –
related parties
|
|
59,328
|
|
|
48,136
|
|
Other
receivables
|
|
15,919
|
|
|
16,885
|
|
Prepaid expenses and
other current assets
|
|
11,188
|
|
|
10,315
|
|
Loans
receivable
|
|
6,425
|
|
|
6,425
|
|
Loans receivable –
related parties
|
|
—
|
|
|
16,500
|
|
|
|
|
|
|
Total current
assets
|
|
380,545
|
|
|
329,068
|
|
|
|
|
|
|
Noncurrent
assets
|
|
|
|
|
Restricted
cash
|
|
746
|
|
|
746
|
|
Land, property and
equipment, net
|
|
11,485
|
|
|
12,130
|
|
Intangible assets,
net
|
|
94,790
|
|
|
103,012
|
|
Goodwill
|
|
239,053
|
|
|
238,505
|
|
Investments in other
entities – equity method
|
|
26,817
|
|
|
28,427
|
|
Investments in
privately held entities
|
|
37,075
|
|
|
896
|
|
Operating lease
right-of-use assets
|
|
20,219
|
|
|
14,248
|
|
Other
assets
|
|
22,487
|
|
|
1,681
|
|
|
|
|
|
|
Total noncurrent
assets
|
|
452,672
|
|
|
399,645
|
|
|
|
|
|
|
Total
assets
|
|
$
|
833,217
|
|
|
$
|
728,713
|
|
|
|
|
|
|
|
Liabilities,
Mezzanine Equity and Shareholders' Equity
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Accounts payable and
accrued expenses
|
|
$
|
24,788
|
|
|
$
|
27,279
|
|
Fiduciary accounts
payable
|
|
1,853
|
|
|
2,027
|
|
Medical
liabilities
|
|
70,273
|
|
|
58,725
|
|
Income taxes
payable
|
|
42,210
|
|
|
4,529
|
|
Dividend
payable
|
|
431
|
|
|
271
|
|
Finance lease
liabilities
|
|
102
|
|
|
102
|
|
Operating lease
liabilities
|
|
3,350
|
|
|
2,990
|
|
Current portion of
long-term debt
|
|
9,500
|
|
|
9,500
|
|
|
|
|
|
|
Total current
liabilities
|
|
152,507
|
|
|
105,423
|
|
|
|
|
|
|
Noncurrent
liabilities
|
|
|
|
|
Deferred tax
liability
|
|
13,654
|
|
|
18,269
|
|
Finance lease
liabilities, net of current portion
|
|
355
|
|
|
416
|
|
Operating lease
liabilities, net of current portion
|
|
17,418
|
|
|
11,373
|
|
Long-term debt, net
of current portion and deferred financing costs
|
|
230,455
|
|
|
232,172
|
|
|
|
|
|
|
Total noncurrent
liabilities
|
|
261,882
|
|
|
262,230
|
|
|
|
|
|
|
Total
liabilities
|
|
414,389
|
|
|
367,653
|
|
|
|
|
|
|
Mezzanine
equity
|
|
|
|
|
Noncontrolling
interest in Allied Physicians of California, a Professional Medical
Corporation
|
|
210,980
|
|
|
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, 36,309,513 and
35,908,057 shares outstanding, excluding 17,475,707 and 17,458,810
treasury shares, at June 30, 2020, and December 31, 2019,
respectively
|
|
36
|
|
|
36
|
|
Additional paid-in
capital
|
|
163,986
|
|
|
159,608
|
|
Retained
earnings
|
|
43,001
|
|
|
31,905
|
|
|
|
207,023
|
|
|
191,549
|
|
|
|
|
|
|
Noncontrolling
interest
|
|
825
|
|
|
786
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
207,848
|
|
|
192,335
|
|
|
|
|
|
|
Total liabilities,
mezzanine equity and stockholders' equity
|
|
$
|
833,217
|
|
|
$
|
728,713
|
|
APOLLO MEDICAL
HOLDINGS, INC.
|
CONSOLIDATED
STATEMENTS OF INCOME
|
(IN THOUSANDS, EXCEPT
PER SHARE AMOUNTS)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June
30,
|
|
Six Months
Ended
June
30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
Revenue
|
|
|
|
|
|
|
|
|
Capitation,
net
|
|
$
|
140,949
|
|
|
$
|
103,224
|
|
|
$
|
281,370
|
|
|
$
|
174,740
|
|
Risk pool settlements
and incentives
|
|
12,003
|
|
|
11,191
|
|
|
23,239
|
|
|
21,285
|
|
Management fee
income
|
|
8,690
|
|
|
10,353
|
|
|
17,505
|
|
|
19,349
|
|
Fee-for-service,
net
|
|
2,270
|
|
|
3,878
|
|
|
5,697
|
|
|
7,959
|
|
Other
income
|
|
1,257
|
|
|
1,404
|
|
|
2,463
|
|
|
2,473
|
|
|
|
|
|
|
|
|
|
|
Total
revenue
|
|
165,169
|
|
|
130,050
|
|
|
330,274
|
|
|
225,806
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
|
Cost of
services
|
|
136,079
|
|
|
101,363
|
|
|
280,283
|
|
|
184,795
|
|
General and
administrative expenses
|
|
11,556
|
|
|
11,818
|
|
|
23,390
|
|
|
22,081
|
|
Depreciation and
amortization
|
|
4,628
|
|
|
4,455
|
|
|
9,330
|
|
|
8,872
|
|
Provision for
doubtful accounts
|
|
—
|
|
|
(2,314)
|
|
|
—
|
|
|
(1,363)
|
|
|
|
|
|
|
|
|
|
|
Total
expenses
|
|
152,263
|
|
|
115,322
|
|
|
313,003
|
|
|
214,385
|
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
|
12,906
|
|
|
14,728
|
|
|
17,271
|
|
|
11,421
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
Income (loss) from
equity method investments
|
|
834
|
|
|
(42)
|
|
|
2,888
|
|
|
(892)
|
|
Gain on sale of
equity method investment
|
|
99,647
|
|
|
—
|
|
|
99,647
|
|
|
—
|
|
Interest
expense
|
|
(2,673)
|
|
|
(311)
|
|
|
(5,541)
|
|
|
(522)
|
|
Interest
income
|
|
863
|
|
|
474
|
|
|
1,792
|
|
|
797
|
|
Other
income
|
|
1,282
|
|
|
24
|
|
|
1,384
|
|
|
211
|
|
|
|
|
|
|
|
|
|
|
Total other income
(expense), net
|
|
99,953
|
|
|
145
|
|
|
100,170
|
|
|
(406)
|
|
|
|
|
|
|
|
|
|
|
Income before
provision for income taxes
|
|
112,859
|
|
|
14,873
|
|
|
117,441
|
|
|
11,015
|
|
|
|
|
|
|
|
|
|
|
Provision for
income taxes
|
|
31,858
|
|
|
4,209
|
|
|
33,453
|
|
|
2,801
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
81,001
|
|
|
10,664
|
|
|
83,988
|
|
|
8,214
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to noncontrolling interest
|
|
73,957
|
|
|
7,119
|
|
|
72,892
|
|
|
4,529
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Apollo Medical Holdings, Inc.
|
|
$
|
7,044
|
|
|
$
|
3,545
|
|
|
$
|
11,096
|
|
|
$
|
3,685
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
– basic
|
|
$
|
0.20
|
|
|
$
|
0.10
|
|
|
$
|
0.31
|
|
|
$
|
0.11
|
|
|
|
|
|
|
|
|
|
|
Earnings per share
– diluted
|
|
$
|
0.19
|
|
|
$
|
0.09
|
|
|
$
|
0.30
|
|
|
$
|
0.10
|
|
APOLLO MEDICAL
HOLDINGS, INC.
|
SUPPLEMENTAL
INFORMATION
|
|
|
|
|
|
|
Capitated
Membership (in thousands)
|
|
|
|
|
|
|
June 30,
2020
|
|
December 31,
2019
|
|
December 31,
2018
|
|
|
|
|
|
|
MSO
|
519
|
|
|
421
|
|
|
665
|
|
IPA
|
541
|
|
|
530
|
|
|
265
|
|
ACO
|
29
|
|
|
29
|
|
|
30
|
|
|
|
|
|
|
|
Total lives under
management
|
1,089
|
|
|
980
|
|
|
960
|
|
Reconciliation of
Net Income to EBITDA and Adjusted EBITDA (in
thousands)
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
June 30,
|
|
Six Months
Ended
June 30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
81,001
|
|
|
$
|
10,664
|
|
|
$
|
83,988
|
|
|
$
|
8,214
|
|
Depreciation and
amortization
|
|
4,628
|
|
|
4,455
|
|
|
9,330
|
|
|
8,872
|
|
Provision for income
taxes
|
|
31,858
|
|
|
4,209
|
|
|
33,453
|
|
|
2,801
|
|
Interest expense
|
|
2,673
|
|
|
311
|
|
|
5,541
|
|
|
522
|
|
Interest income
|
|
(863)
|
|
|
(474)
|
|
|
(1,792)
|
|
|
(797)
|
|
EBITDA
|
|
119,297
|
|
|
19,165
|
|
|
130,520
|
|
|
19,612
|
|
|
|
|
|
|
|
|
|
|
(Income) loss from equity
method investments
|
|
(834)
|
|
|
42
|
|
|
(2,888)
|
|
|
892
|
|
Gain on sale of equity
method investment
|
|
(99,647)
|
|
|
—
|
|
|
(99,647)
|
|
|
—
|
|
Other income
|
|
(1,282)
|
|
|
(24)
|
|
|
(1,384)
|
|
|
(211)
|
|
Provider bonus
payments
|
|
2,000
|
|
|
—
|
|
|
2,000
|
|
|
10,000
|
|
Provision for doubtful
accounts
|
|
—
|
|
|
(2,314)
|
|
|
—
|
|
|
(1,363)
|
|
Net loss adjustment for
recently acquired IPAs
|
|
4,070
|
|
|
—
|
|
|
8,833
|
|
|
—
|
|
Adjusted
EBITDA
|
|
$
|
23,604
|
|
|
$
|
16,869
|
|
|
$
|
37,434
|
|
|
$
|
28,930
|
|
Guidance
Reconciliation of Net Income to EBITDA and Adjusted EBITDA (in
thousands)
|
|
|
Year
Ending
|
|
|
December 31,
2020
|
|
|
|
|
|
Low
|
|
High
|
Net
income (1)
|
|
$
|
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
(1)
|
|
155,000
|
|
|
167,000
|
|
|
|
|
|
|
Income from equity method
investments (2)
|
|
(95,000)
|
|
|
(94,000)
|
|
Net loss adjustment for
recently acquired IPAs
|
|
15,000
|
|
|
17,000
|
|
Adjusted
EBITDA
|
|
$75,000
|
|
|
$90,000
|
|
|
|
(1)
|
Net income and EBITDA
includes the gain on sale of UCAP's 48.9% investment in UCI to
Bright, which closed on April 30, 2020. UCAP is a 100% owned
subsidiary of APC and its 48.9% investment in UCI is an excluded
asset that remains solely for the benefit of APC and its
shareholders. As such, the gain on sale did not affect the net
income and adjusted EBITDA attributable to ApolloMed.
|
(2)
|
Income from equity
method investments is mainly attributed to the sale of UCAP's 48.9%
investment in UCI to Bright, which closed on April 30, 2020. UCAP
is a 100% owned subsidiary of APC and its 48.9% investment in UCI
is an excluded asset that remains solely for the benefit of APC and
its shareholders. As such, the gain on sale did not affect the net
income and adjusted EBITDA attributable to ApolloMed.
|
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 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. The reconciliation between certain GAAP and
non-GAAP measures is provided above.
View original
content:http://www.prnewswire.com/news-releases/apollo-medical-holdings-inc-reports-second-quarter-ended-june-30-2020-results-301108253.html
SOURCE Apollo Medical Holdings, Inc.