Apollo Medical Holdings Reports 46% Revenue Growth Year Over Year For The 1st Quarter Of 2018

Apollo Medical Holdings Reports 46% Revenue Growth Year Over Year For The 1st Quarter Of 2018

PR Newswire

ALHAMBRA, Calif. and GLENDALE, Calif., May 15, 2018 /PRNewswire/ -- Apollo Medical Holdings, Inc. ("ApolloMed" or "the Company") AMEH, an integrated population health management company, today announced its consolidated 1st Quarter financial results for the three months ended March 31, 2018.

Financial Highlights for the Three Months Ended March 31, 2018 Compared to the Three Months Ended March 31, 2017 (unaudited):

  • Net revenue of $124.2 million as compared to net revenue of $85.3 million in the comparable period of 2017, an increase of 46%.
  • Income from operations of $22.7 million as compared to $15.7 million in the comparable period of 2017, an increase of 45%.
  • Net income attributable to Apollo Medical Holdings, Inc. of $2.2 million as compared to $4.3 million in the comparable period of 2017, a decrease of 50%. The decrease in net income was due to post-merger integration-related costs and investments to support two new management services agreements ("MSA"). The Company expects to substantially complete its merger integration by the end of Q2 and does not expect any further material expenditures to support the new contracts beyond Q1.
  • As of March 31, 2018, the Company had total assets of $521.6 million, including cash and cash equivalents of $103.7 million.

Notes to the Financial Highlights for the Three Months Ended March 31, 2018:

  • On January 8, 2018, the Company announced that it had entered into a ten year MSA with Accountable Health Care IPA to manage 160,000 capitated health plan members, including all hospital risk pools.
  • On February 5, 2018, the Company announced that it had entered into an MSA with Golden Shore Medical Group to manage over 100,000 capitated health plan members in four California counties. Dr. J. Mario Molina, formerly the Chief Executive Officer and Chairman of Molina Healthcare, serves as President and owner of Golden Shore.

"We are very pleased with the progress of our long term growth initiatives, especially with our continued strong organic revenue growth," stated Warren Hosseinion, M.D., Co-Chief Executive Officer of Apollo Medical Holdings.  "We are confident in our future and believe we are well-positioned for continued growth."

"In Q1 2018, our management team focused on integrating the two companies post-merger," stated Thomas Lam, M.D., Co-Chief Executive Officer of Apollo Medical Holdings.  "We also made important investments to support the management of the additional 260,000 patients."

"We are pleased with our Q1 2018 financial results," stated Kenneth Sim, M.D., Executive Chairman of Apollo Medical Holdings. "We believe that there will be no further material investments necessary to support the new contracts in Q2 and expect that post-merger integration costs will be less in Q2 than in Q1 and the integration will be substantially completed by the end of Q2. We look forward to the rest of fiscal year 2018."

For more details on ApolloMed's March 31, 2018 quarter end results, please refer to the Company's Quarterly Report on Form 10-Q filed with the U.S. Securities Exchange Commission and accessible at www.sec.gov.  

APOLLO MEDICAL HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)





March 31,

2018





December 31,

2017

















Assets



































Current assets

















Cash and cash equivalents



$

103,731,761





$

99,749,199



Restricted cash – short-term





18,028,116







18,005,661



Fiduciary cash





1,386,474







2,017,437



Investment in marketable securities





1,138,477







1,143,095



Receivables, net





52,805,123







20,117,304



Prepaid expenses and other current assets





3,525,437







3,126,866





















Total current assets





180,615,388







144,159,562





















Noncurrent assets

















Land, property and equipment, net





13,700,034







13,814,306



Intangible assets, net





99,138,657







103,533,558



Goodwill





188,933,191







189,847,202



Loans receivable – related parties





5,000,000







5,000,000



Loan receivable





10,000,000







10,000,000



Investments in other entities – equity method





21,875,500







21,903,524



Restricted cash – long-term





745,293







745,235



Other assets





1,585,850







1,632,406





















Total noncurrent assets





340,978,525







346,476,231





















Total assets



$

521,593,913





$

490,635,793

















Liabilities, Mezzanine Equity and Stockholders' Equity



































Current liabilities

















Lines of credit



$

5,000,000





$

5,025,000



Accounts payable and accrued expenses





12,110,530







13,279,620



Incentives payable





14,900,000







21,500,000



Fiduciary accounts payable





1,386,474







2,017,437



Medical liabilities





69,110,826







63,972,318



Income taxes payable





7,614,669







3,198,495



Bank loan, short-term





394,783







510,391



Capital lease obligations





99,480







98,738





















Total current liabilities





110,616,762







109,601,999





















Noncurrent liabilities

















Deferred tax liability





30,055,819







24,916,598



Liability for unissued equity shares





1,185,025







1,185,025



Dividend payable





18,000,000







18,000,000



Capital lease obligations, net of current portion





593,852







619,001





















Total noncurrent liabilities





49,834,696







44,720,624





















Total liabilities





160,451,458







154,322,623





















Commitments and Contingencies



































Mezzanine equity

















Noncontrolling interest in Allied Pacific of California IPA ("APC")





190,654,312







172,129,744





















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, par value $0.001; 100,000,000 shares authorized, 32,652,295 and 32,304,876 shares outstanding, excluding 1,682,110 shares held by APC, at March 31, 2018 and December 31, 2017, respectively





32,653







32,305



Additional paid-in capital





160,736,190







158,181,192



Retained earnings





4,897,454







1,734,531









165,666,297







159,948,028





















Noncontrolling interest





4,821,846







4,235,398





















Total stockholders' equity





170,488,143







164,183,426





















Total liabilities, mezzanine equity and stockholders' equity



$

521,593,913





$

490,635,793



 

APOLLO MEDICAL HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

Three Months Ended March 31,



2018





2017

















Revenue

















Capitation, net



$

85,905,284





$

64,716,133



Risk pool settlements and incentives





17,986,736







11,137,200



Management fee income





12,074,572







6,537,110



Fee-for-service, net





7,748,109







2,663,913



Other income





452,026







281,706





















Total revenue





124,166,727







85,336,062





















Expenses

















Cost of services





84,670,608







59,607,514



General and administrative expenses





11,735,898







5,211,633



Depreciation and amortization





5,058,512







4,836,351





















Total expenses





101,465,018







69,655,498





















Income from operations





22,701,709







15,680,564





















Other income (expense)

















(Loss) income from equity method investments





(28,024)







2,227,262



Interest expense





(85,001)







(811)



Interest income





269,818







182,285



Change in fair value of derivative instrument





-







1,522,222



Other income





87,993







1,514





















Total other income, net





244,786







3,932,472





















Income before provision for income taxes





22,946,495







19,613,036





















Provision for income taxes





7,228,840







7,889,245





















Net income





15,717,655







11,723,791





















Net income attributable to noncontrolling interests





13,557,200







7,374,130





















Net income attributable to Apollo Medical Holdings, Inc.



$

2,160,455





$

4,349,661





















Earnings per share – basic



$

0.07





$

0.17





















Earnings per share – diluted



$

0.06





$

0.15





















Weighted average shares of common stock outstanding – basic





32,421,467







25,067,954





















Weighted average shares of common stock outstanding – diluted





38,098,373







28,445,647





















Note About Historical Results for Periods Prior to the Merger

Following the closing of the merger involving Apollo Medical Holdings, Inc. ("ApolloMed") and Network Medical Management, Inc. ("NMM") in December 2017 (the "Merger"), NMM is now a wholly-owned subsidiary of ApolloMed and the former NMM shareholders own a majority of the issued and outstanding common stock of ApolloMed. For accounting purposes, the Merger is treated as a "reverse acquisition" and NMM is considered the accounting acquirer and ApolloMed the accounting acquiree. Accordingly, as of the closing of the Merger, for comparison purposes, NMM's historical results of operations replaced ApolloMed's historical results of operations for all periods prior to the Merger, and the results of operations of both companies are included in the Company's consolidated financial statements for all periods following the Merger.

Note About Consolidated Entities

The Company consolidates entities in which it has a controlling financial interest. The Company consolidates subsidiaries in which the Company 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 (including certain VIEs) in the Company's consolidated entities. The amount of net income attributable to noncontrolling interests is disclosed in the condensed consolidated statements of income.

Note About Stockholders' Equity, Certain Treasury Stock and Earnings Per Share

As of the date of this press release, 1,000,970 shares of ApolloMed's common stock to be issued as part of the Merger are subject to ApolloMed receiving from those 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 condensed 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 (d.b.a. Allied Pacific of California IPA), a variable interest entity of the Company, are legally issued and outstanding but excluded from shares of common stock outstanding in the Company's condensed 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)

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 Physician Associations (each, an "IPA"), are 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.  Led by a management team with over two decades of experience,  ApolloMed is addressing the healthcare needs of its patients by leveraging its integrated health management and healthcare delivery platform that includes: Network Medical Management (MSO),  Apollo Medical Management (MSO), ApolloMed Hospitalists, APA ACO (Next Generation ACO), Allied Physicians of California (IPA), Maverick Medical Group (IPA) and Apollo Care Connect (Digital Population Health Management Platform). ApolloMed strives to improve medical outcomes with high-quality, cost-efficient care.  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 integration-related costs following the closing of the Merger, the expected substantial completion of such integration, the future growth of the Company, the Company's future business model, financial conditions and strategic transactions (including mergers, acquisitions and management services agreements) as well as the prospects of and future investments for the Company's strategic transactions. 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, associated with such statements, many of which are beyond the control of the Company, which could cause the actual results, performance or achievements of the Company and its subsidiaries and variable interest entities to be materially different than those that may be anticipated on the basis of historical trends. Examples of such risks and uncertainties include but are not limited to:

  • risks related to the Company's ability, following the consummation of the reverse merger of Apollo Medical Holdings, Inc. and Network Medical Management, Inc., to successfully integrate operations of the two groups, including realizing the synergies anticipated from the transaction, which may not be fully realized or may take longer to realize than expected; and the Company's ability to successfully locate new strategic targets and integrate its operations following mergers, acquisitions or other strategic transactions, including that the integration may be more costly or more time consuming and complex than anticipated and that synergies anticipated to be realized may not be fully realized or may take longer to realize than expected,
  • the Company's dependence on a few key payors,
  • the impact of emerging and existing competitors, the effect of new legislation on the Company's industry and business,
  • the effectiveness of the Company's compliance and control initiatives,
  • the success of the Company's focus on next generation accountable care organization ("NGACO"), including whether the Company can continue to participate in the All-Inclusive Population-Based Payment ("AIPBP") Mechanism of the NGACO Model,
  • the possibility that the Company's expenses may exceed capitation payments, whether from CMS under the AIPBP Mechanism or health plans, which could lead to substantial losses, including that the final settlements of such incurred expenses and the Company's actual earnings or losses are generally determined in subsequent periods,
  • general economic uncertainty, and
  • other factors described from time to time in the Company's reports to the U.S. Securities and Exchange Commission (including without limitation the "Risk Factors" discussed in the Company's Annual Report on Form 10-K filed on April 2, 2018).

Should one or more of these risks or uncertainties materialize, or should any expectations or assumptions underlying the relevant forward-looking statements prove incorrect, the Company's actual results, performance or achievements may vary materially from those described in such statements as being expected, anticipated, intended, planned, believed, sought, estimated or projected. Investors and other readers, therefore, should not place reliance on any forward-looking statements or use any historical trends to anticipate or predicate results or trends in future periods. Any statements included herein are made only as of the date hereof. The Company undertakes no obligation to update or revise any statement to reflect the impact of circumstances or events that arise after the date hereof, except as required by law, and also undertakes no obligation to correct or update information prepared by third parties.

FOR MORE INFORMATION, PLEASE CONTACT:

Warren Hosseinion, M.D.

Co-Chief Executive Officer

Apollo Medical Holdings, Inc.

(818) 839-5200

warrenhoss@apollomed.net                                                                     

 

Cision View original content:http://www.prnewswire.com/news-releases/apollo-medical-holdings-reports-46-revenue-growth-year-over-year-for-the-1st-quarter-of-2018-300649100.html

SOURCE Apollo Medical Holdings, Inc.

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