/C O R R E C T I O N -- Apollo Medical Holdings, Inc./

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.