In the news release, Apollo Medical Holdings, Inc. Reports: 3Q19
Total Revenues of $156.1 Million, Up
20.0% Over 2Q19; 3Q19 Adjusted EBITDA of $22.8 Million, Up 55.6% Over 3Q18; Capitated
Membership of Over One Million Managed Lives; and Elite Status
Awarded by APG, issued 07-Nov-2019 by
Apollo Medical Holdings, Inc. over PR Newswire, we are advised by
the company that the corrected version includes a line item for the
current portion of its long-term debt on its condensed consolidated
balance sheets as of September 30,
2019 and December 31, 2018,
which had been omitted from the press release originally issued
regarding its consolidated financial results for the quarter ended
September 30, 2019 . The complete,
corrected release follows:
Apollo Medical Holdings, Inc. Reports: 3Q19 Total Revenues of
$156.1 Million, Up 20.0% Over 2Q19; 3Q19 Adjusted EBITDA of $22.8
Million, Up 55.6% Over 3Q18; Capitated Membership of Over One
Million Managed Lives; and Elite Status Awarded by APG
ALHAMBRA, Calif., Nov. 7, 2019 /PRNewswire/ -- Apollo Medical
Holdings, Inc. ("ApolloMed" or the "Company") (NASDAQ: AMEH), an
integrated population health management company, announced its
consolidated financial results for the quarter ended September 30, 2019 today.
"We are very pleased with our third quarter financial and
operational results. During the quarter, we expanded our
fully-capitated membership base and network of contracted
physicians through our acquisition of Accountable Health Care IPA.
In October 2019, we announced a new
management services agreement adding 145,000 member lives under
management," stated Kenneth Sim,
M.D., Executive Chairman and Co-Chief Executive Officer of
ApolloMed.
"We continue to make meaningful progress towards our goal of
reaching two million total lives under management. This progress is
primarily driven by our recent acquisitions, which added
271,000 fully-capitated lives year to date, and our recently
announced management services agreement, which will add 145,000
managed lives into our network in 2020. These transactions further
expand our footprint into California's Los
Angeles and Inland Empire markets. We see a robust
national pipeline of managed IPAs that can be successfully
incorporated onto our platform," continued Dr. Sim.
"Our patient-centric, physicians-led approach is unique to the
market and positions us well to benefit from the continued shift
towards value-based care. We remain confident that we will continue
to grow our membership base and achieve our growth objectives,"
concluded Dr. Sim.
Financial Highlights for the Quarter Ended September 30, 2019:
- Total revenue of $156.1 million
for the quarter ended September 30,
2019, a decrease of 6% as compared to $166.7 million for the quarter ended September 30, 2018, primarily due to the prior
year adoption of a revenue accounting standard on January 1, 2018, resulting in a significant
recognition of risk pool revenue of $46.8
million in the third quarter of 2018.
- Capitation revenue of $130.8
million, representing 84% of our total revenue, an increase
of 44% compared to $90.6 million for
the quarter ended September 30,
2018.
- Adjusted EBITDA of $22.8 million
for the quarter ended September 30,
2019, an increase of 56%, as compared to $14.6 million for the quarter ended September 30, 2018.
- Net income attributable to Apollo Medical Holdings, Inc. of
$3.7 million for the quarter ended
September 30, 2019, compared to
$9.1 million for the quarter ended
September 30, 2018. The decrease from
the prior year was primarily due to the adoption of a revenue
accounting standard on January 1,
2018, resulting in a significant recognition of risk pool
revenue of $46.8 million in the third
quarter of 2018.
- Total membership of one million managed lives as of
September 30, 2019. Fully-capitated
lives of 540,000, under our consolidated Independent Physicians
Associations (IPA), at the end of the third quarter. An increase of
103% compared to December 31, 2018,
primarily due to the acquisition of Alpha Care Medical Group and
Accountable Health Care IPA.
- Closed inaugural $290 million
syndicated credit facility and series of transactions with APC and
AP-AMH.
- Awarded Elite status for the America's Physician Groups
Standards of Excellence Survey for 2019.
For more details on ApolloMed's September
30, 2019 quarter end results, please refer to the Company's
Quarterly Report on Form 10-Q to be filed with the U.S. Securities
Exchange Commission and accessible at www.sec.gov.
APOLLO MEDICAL
HOLDINGS, INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(UNAUDITED)
|
|
|
September 30,
2019
|
|
December 31,
2018
|
Assets
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
230,298,252
|
|
|
$
|
106,891,503
|
|
Restricted
cash
|
20,150
|
|
|
—
|
|
Investment in
marketable securities
|
1,154,480
|
|
|
1,127,102
|
|
Receivables,
net
|
19,731,189
|
|
|
7,127,217
|
|
Receivables, net –
related parties
|
37,708,178
|
|
|
49,328,739
|
|
Other
receivables
|
15,527,520
|
|
|
1,003,133
|
|
Prepaid expenses and
other current assets
|
10,495,938
|
|
|
7,385,098
|
|
Loan receivable -
related parties
|
6,425,000
|
|
|
—
|
|
|
|
|
|
Total current
assets
|
321,360,707
|
|
|
172,862,792
|
|
|
|
|
|
Noncurrent
assets
|
|
|
|
Land, property and
equipment, net
|
12,427,107
|
|
|
12,721,082
|
|
Intangible assets,
net
|
114,166,305
|
|
|
86,875,883
|
|
Goodwill
|
237,134,772
|
|
|
185,805,880
|
|
Loans receivable –
related parties, net of current portion
|
12,500,000
|
|
|
17,500,000
|
|
Investment in other
entities – equity method
|
35,840,105
|
|
|
34,876,980
|
|
Investment in a
privately held entity that does not report net asset value per
share
|
896,000
|
|
|
405,000
|
|
Restricted
cash
|
746,104
|
|
|
745,470
|
|
Right-of-use
assets
|
13,540,129
|
|
|
—
|
|
Other
assets
|
1,633,153
|
|
|
1,205,962
|
|
|
|
|
|
Total noncurrent
assets
|
428,883,675
|
|
|
340,136,257
|
|
|
|
|
|
Total
assets
|
$
|
750,244,382
|
|
|
$
|
512,999,049
|
|
Liabilities,
mezzanine equity and stockholders' equity
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
Accounts payable and
accrued expenses
|
$
|
35,539,917
|
|
|
$
|
25,075,489
|
|
Fiduciary accounts
payable
|
1,734,142
|
|
|
1,538,598
|
|
Medical
liabilities
|
53,819,647
|
|
|
33,641,701
|
|
Income taxes
payable
|
1,392,492
|
|
|
11,621,861
|
|
Bank loan
|
—
|
|
|
40,257
|
|
Dividend
payable
|
271,279
|
|
|
—
|
|
Finance lease
obligation
|
101,741
|
|
|
101,741
|
|
Lease
liabilities
|
2,836,010
|
|
|
—
|
|
Current portion of
long term debt
|
9,500,000
|
|
|
—
|
|
|
|
|
|
Total current
liabilities
|
105,195,228
|
|
|
72,019,647
|
|
|
|
|
|
Noncurrent
liabilities
|
|
|
|
Lines of credit –
related party
|
—
|
|
|
13,000,000
|
|
Deferred tax
liability
|
30,199,423
|
|
|
19,615,935
|
|
Liability for
unissued equity shares
|
1,185,025
|
|
|
1,185,025
|
|
Finance lease
obligation
|
441,241
|
|
|
517,261
|
|
Lease
liabilities
|
10,670,364
|
|
|
—
|
|
Long-term debt, net
of deferred financing costs
|
234,149,063
|
|
|
—
|
|
|
|
|
|
Total noncurrent
liabilities
|
276,645,116
|
|
|
34,318,221
|
|
|
|
|
|
Total
liabilities
|
381,840,344
|
|
|
106,337,868
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
|
|
|
|
|
Mezzanine
equity
|
|
|
|
Noncontrolling
interest in Allied Physicians of California, a Professional Medical
Corporation ("APC")
|
176,230,074
|
|
|
225,117,029
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
Series A Preferred
stock, $0.001 par value; 5,000,000 shares authorized (inclusive of
all preferred stock, including Series B Preferred stock); 1,111,111
issued and zero outstanding at September 30, 2019 and December 31,
2018, respectively
|
—
|
|
|
—
|
|
Series B Preferred
stock, $0.001 par value; 5,000,000 shares authorized (inclusive of
all preferred stock, including Series A Preferred stock); 555,555
issued and zero outstanding at September 30, 2019 and December 31,
2018, respectively
|
—
|
|
|
—
|
|
Common stock, $0.001
par value; 100,000,000 shares authorized, 34,822,933 and 34,578,040
shares outstanding, excluding 16,959,069 and 1,850,603 treasury
shares, at September 30, 2019 and December 31, 2018,
respectively
|
34,823
|
|
|
34,578
|
|
Additional paid-in
capital
|
165,521,888
|
|
|
162,723,051
|
|
Retained
earnings
|
25,177,257
|
|
|
17,788,203
|
|
|
190,733,968
|
|
|
180,545,832
|
|
|
|
|
|
Noncontrolling
interest
|
1,439,996
|
|
|
998,320
|
|
|
|
|
|
Total stockholders'
equity
|
192,173,964
|
|
|
181,544,152
|
|
|
|
|
|
Total liabilities,
mezzanine equity and stockholders' equity
|
$
|
750,244,382
|
|
|
$
|
512,999,049
|
|
APOLLO MEDICAL
HOLDINGS, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
Revenue
|
|
|
|
|
|
|
|
Capitation,
net
|
$
|
130,807,706
|
|
|
$
|
90,612,720
|
|
|
$
|
305,548,176
|
|
|
$
|
266,834,186
|
|
Risk pool settlements
and incentives
|
11,355,069
|
|
|
57,788,932
|
|
|
32,639,960
|
|
|
89,641,885
|
|
Management fee
income
|
8,517,586
|
|
|
12,851,178
|
|
|
27,866,805
|
|
|
37,297,358
|
|
Fee-for-service,
net
|
4,099,660
|
|
|
4,723,809
|
|
|
12,058,762
|
|
|
15,524,149
|
|
Other
income
|
1,280,203
|
|
|
752,643
|
|
|
3,753,258
|
|
|
4,021,480
|
|
Total
revenue
|
156,060,224
|
|
|
166,729,282
|
|
|
381,866,961
|
|
|
413,319,058
|
|
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
|
Cost of
services
|
131,129,813
|
|
|
96,268,804
|
|
|
315,925,388
|
|
|
280,589,061
|
|
General and
administrative expenses
|
7,949,814
|
|
|
9,040,336
|
|
|
30,031,329
|
|
|
31,481,810
|
|
Depreciation and
amortization
|
4,920,429
|
|
|
4,843,037
|
|
|
13,792,581
|
|
|
14,819,627
|
|
Provision for
doubtful accounts
|
—
|
|
|
—
|
|
|
(1,363,415)
|
|
|
—
|
|
Impairment of
intangibles
|
1,994,000
|
|
|
—
|
|
|
1,994,000
|
|
|
—
|
|
Total
expenses
|
145,994,056
|
|
|
110,152,177
|
|
|
360,379,883
|
|
|
326,890,498
|
|
|
|
|
|
|
|
|
|
Income from
operations
|
10,066,168
|
|
|
56,577,105
|
|
|
21,487,078
|
|
|
86,428,560
|
|
|
|
|
|
|
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
Income (loss) from
equity method investments
|
2,053,730
|
|
|
(4,215,056)
|
|
|
1,161,791
|
|
|
(2,573,219)
|
|
Interest
expense
|
(827,905)
|
|
|
(178,318)
|
|
|
(1,349,933)
|
|
|
(374,002)
|
|
Interest
income
|
508,856
|
|
|
418,449
|
|
|
1,305,528
|
|
|
1,180,990
|
|
Other
income
|
2,620,485
|
|
|
609,203
|
|
|
2,831,830
|
|
|
884,948
|
|
|
|
|
|
|
|
|
|
Total other income
(expense), net
|
4,355,166
|
|
|
(3,365,722)
|
|
|
3,949,216
|
|
|
(881,283)
|
|
|
|
|
|
|
|
|
|
Income before
provision for income taxes
|
14,421,334
|
|
|
53,211,383
|
|
|
25,436,294
|
|
|
85,547,277
|
|
|
|
|
|
|
|
|
|
Provision for
income taxes
|
3,682,472
|
|
|
14,585,942
|
|
|
6,483,630
|
|
|
23,338,589
|
|
|
|
|
|
|
|
|
|
Net
income
|
10,738,862
|
|
|
38,625,441
|
|
|
18,952,664
|
|
|
62,208,688
|
|
|
|
|
|
|
|
|
|
Net income
attributable to noncontrolling interests
|
7,034,688
|
|
|
29,519,043
|
|
|
11,563,610
|
|
|
48,277,734
|
|
|
|
|
|
|
|
|
|
Net income
attributable to Apollo Medical Holdings, Inc.
|
$
|
3,704,174
|
|
|
$
|
9,106,398
|
|
|
$
|
7,389,054
|
|
|
$
|
13,930,954
|
|
|
|
|
|
|
|
|
|
Earnings per share
– basic
|
$
|
0.11
|
|
|
$
|
0.28
|
|
|
$
|
0.21
|
|
|
$
|
0.43
|
|
|
|
|
|
|
|
|
|
Earnings per share
– diluted
|
$
|
0.10
|
|
|
$
|
0.24
|
|
|
$
|
0.20
|
|
|
$
|
0.37
|
|
|
|
|
|
|
|
|
|
Weighted average
shares of common stock outstanding – basic
|
34,643,754
|
|
|
32,917,007
|
|
|
34,555,124
|
|
|
32,672,793
|
|
|
|
|
|
|
|
|
|
Weighted average
shares of common stock outstanding – diluted
|
37,792,266
|
|
|
38,387,700
|
|
|
37,816,698
|
|
|
38,010,838
|
|
APOLLO MEDICAL
HOLDINGS, INC.
SUPPLEMENTAL
INFORMATION
(UNAUDITED)
Capitated
Membership
|
|
|
September 30,
2019
|
|
December 31,
2018
|
|
December 31,
2017
|
|
|
|
|
|
|
MSO
|
430,000
|
|
|
665,000
|
|
|
670,000
|
|
IPA
|
540,000
|
|
|
265,000
|
|
|
270,000
|
|
ACO
|
30,000
|
|
|
30,000
|
|
|
29,000
|
|
|
|
|
|
|
|
Total lives under
management
|
1,000,000
|
|
|
960,000
|
|
|
969,000
|
|
Reconciliation of
Net Income to EBITDA and to Adjusted EBITDA
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
Net
income
|
$
|
10,738,862
|
|
|
$
|
38,625,441
|
|
|
$
|
18,952,664
|
|
|
$
|
62,208,688
|
|
Depreciation and
amortization
|
4,920,429
|
|
|
4,843,037
|
|
|
13,792,581
|
|
|
14,819,627
|
|
Provision for income
taxes
|
3,682,472
|
|
|
14,585,942
|
|
|
6,483,630
|
|
|
23,338,589
|
|
Interest expense
|
827,905
|
|
|
178,318
|
|
|
1,349,933
|
|
|
374,002
|
|
Interest income
|
(508,856)
|
|
|
(418,449)
|
|
|
(1,305,528)
|
|
|
(1,180,990)
|
|
EBITDA
|
19,660,812
|
|
|
57,814,289
|
|
|
39,273,280
|
|
|
99,559,916
|
|
|
|
|
|
|
|
|
|
(Income) loss - equity
method investments
|
(2,053,730)
|
|
|
4,215,056
|
|
|
(1,161,791)
|
|
|
2,573,219
|
|
Other income
|
(2,620,485)
|
|
|
(609,203)
|
|
|
(2,831,830)
|
|
|
(884,948)
|
|
Adoption of revenue
accounting standard
|
—
|
|
|
(46,800,000)
|
|
|
—
|
|
|
(49,640,000)
|
|
Provider bonus
payments
|
2,100,000
|
|
|
—
|
|
|
12,100,000
|
|
|
—
|
|
Net provision for doubtful
accounts
|
—
|
|
|
—
|
|
|
(1,363,415)
|
|
|
—
|
|
Impairment of
intangibles
|
1,994,000
|
|
|
—
|
|
|
1,994,000
|
|
|
—
|
|
Severance
payments
|
—
|
|
|
—
|
|
|
—
|
|
|
1,436,000
|
|
EBITDA adjustment for
recently acquired IPAs
|
3,673,000
|
|
|
—
|
|
|
5,565,000
|
|
|
—
|
|
Adjusted
EBITDA
|
$
|
22,753,597
|
|
|
$
|
14,620,142
|
|
|
$
|
53,575,244
|
|
|
$
|
53,044,187
|
|
Use of Non-GAAP Financial Measures
This section contains non-GAAP financial measures, including
Earnings Before Interest, Taxes, Depreciation and Amortization
("EBITDA"), and Adjusted EBITDA. These measures are not in
accordance with, or are an alternative to, measures derived from
generally accepted accounting principles, or GAAP, and may be
different from other non-GAAP financial measures used by other
companies. The Company believes the presentation of these non-GAAP
financial measures provides useful information to investors
regarding various financial and business trends relating to the
Company's financial condition and results of operations. When GAAP
financial measures are viewed in conjunction with non-GAAP
financial measures, investors are provided with a more meaningful
understanding of ApolloMed'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. Reconciliation between certain GAAP and non-GAAP measures
is provided above.
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. Effective September 1, 2019 the condensed consolidated
balance sheet as of September 30,
2019 and condensed consolidated statements of income for the
three and nine months ended September 30,
2019, also includes the results of Accountable Health Care
IPA.
Note About Stockholders' Equity, Certain Treasury Stock and
Earnings Per Share
As of the date of this press release, 480,212 shares of
ApolloMed's common stock to be issued as part of the merger (the
"Merger") involving ApolloMed and Network Medical Management, Inc.
("NMM") in 2017 are subject to ApolloMed receiving from certain
former NMM shareholders a properly completed letter of transmittal
(and related exhibits) before such former NMM shareholders may
receive their pro rata portion of ApolloMed common stock and
warrants. 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 the Company is legally obligated to issue these
shares as of the closing of the Merger.
Shares of ApolloMed's common stock owned by Allied Physicians of
California IPA, a Professional Medical Corporation, (d.b.a. Allied
Pacific of California IPA), 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 continued
growth, acquisition strategy, ability to delivery sustainable
long-term value, ability to respond to the changing environment,
operational focus, strategic growth plans, 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 US Securities and
Exchange Commission (the "SEC"), including, without limitation the
risk factors discussed in the Company's Annual
Report on Form 10-K filed with the SEC on March 18,
2019.
FOR MORE INFORMATION, PLEASE CONTACT:
Asher Dewhurst
(443) 213-0500
asher.dewhurst@westwicke.com
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SOURCE Apollo Medical Holdings, Inc.