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.
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.
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SOURCE Apollo Medical Holdings, Inc.