Press Releases

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

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.

SOURCE Apollo Medical Holdings, Inc.


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