Delaware | 001-37392 | 95-4472349 | ||
(State or Other Jurisdiction | (Commission File | (I.R.S. Employer | ||
of Incorporation) | Number) | Identification Number) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Precommencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Precommencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock | AMEH | Nasdaq Capital Market |
Item 2.02 | Results of Operations and Financial Condition. |
Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Item 9.01 | Financial Statements And Exhibits |
(d) | Exhibits. |
Exhibit No. | Description | |
APOLLO MEDICAL HOLDINGS, INC. | ||
Dated: May 27, 2020 | By: | /s/ Thomas S. Lam, M.D. |
Name: Title: | Thomas S. Lam, M.D. Co-Chief Executive Officer |
• | Total revenue of $165.1 million for the quarter ended March 31, 2020, an increase of 72% as compared to $95.8 million for the quarter ended March 31, 2019, primarily due to our acquisitions of Alpha Care Medical Group on May 31, 2019 and Accountable Health Care IPA on August 30, 2019, which companies contributed revenue of approximately, $32.5 million and $12.7 million, respectively, for the quarter ended March 31, 2020. |
• | Capitation revenue, net, of $140.4 million for the quarter ended March 31, 2020, an increase of 96% compared to $71.5 million for the quarter ended March 31, 2019. Capitation revenue represented 85% of our total revenue for the quarter ended March 31, 2020. |
• | Risk pool settlements and incentives revenue of $11.2 million for the quarter ended March 31, 2020, an increase of 11%, as compared to $10.1 million for the quarter ended March 31, 2019. |
• | Net income of $3.0 million for the quarter ended March 31, 2020, compared to a net loss of $2.5 million for the quarter ended March 31, 2019. |
• | Net income attributable to Apollo Medical Holdings, Inc. of $4.1 million for the quarter ended March 31, 2020, compared to net income attributable to Apollo Medical Holdings, Inc. of $0.1 million for the quarter ended March 31, 2019. The increase from the prior year was primarily due to preferred dividends ApolloMed received from its affiliate, Allied Physicians of California IPA ("APC"), as a result of the series of transactions we completed with APC in September 2019. |
• | Effective January 1, 2020, we began providing select management services to Community Family Care Medical Group IPA, Inc., serving approximately 145,000 members in Southern California, which accounted for approximately $1.7 million in management fee income for the quarter ended March 31, 2020. |
• | The Company further announced today that Chief Technology Officer, Brandon Sim, and Chief Financial Officer, Eric Chin, have been appointed as the Company's Interim Co-Chief Operating Officers, effective May 26, 2020. Messrs. Sim and Chin will be replacing Hing Ang, who had served as the Company's Chief Operating Officer for over two years. In addition to their new positions, Messrs. Sim and Chin will remain as the Company's Chief Technology Officer and Chief Financial Officer, respectively. |
• | Maintaining total revenue of between $665.0 million and $675.0 million, |
• | Adjusting net income from a range of $20.0 million and $30.0 million (disclosed on March 12, 2020) to a range of $100.0 million and $110.0 million, |
• | Adjusting EBITDA from a range of $55.0 million and $67.0 million (disclosed on March 12, 2020) to a range of $155.0 million and $167.0 million, and |
• | Maintaining adjusted EBITDA of between $75.0 million and $90.0 million. |
APOLLO MEDICAL HOLDINGS, INC. | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) | ||||||||
March 31, | December 31, | |||||||
2020 | 2019 | |||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 80,892 | $ | 103,189 | ||||
Restricted cash | 75 | 75 | ||||||
Investment in marketable securities | 117,075 | 116,539 | ||||||
Receivables, net | 18,012 | 11,004 | ||||||
Receivables, net – related parties | 50,911 | 48,136 | ||||||
Other receivables | 16,362 | 16,885 | ||||||
Prepaid expenses and other current assets | 11,811 | 10,315 | ||||||
Loans receivable | 6,425 | 6,425 | ||||||
Loans receivable – related parties | 16,500 | 16,500 | ||||||
Total current assets | 318,063 | 329,068 | ||||||
Noncurrent assets | ||||||||
Land, property and equipment, net | 11,876 | 12,130 | ||||||
Intangible assets, net | 98,840 | 103,012 | ||||||
Goodwill | 238,539 | 238,505 | ||||||
Investments in other entities – equity method | 30,781 | 28,427 | ||||||
Investments in privately held entities | 896 | 896 | ||||||
Restricted cash | 746 | 746 | ||||||
Operating lease right-of-use assets | 18,199 | 14,248 | ||||||
Other assets | 6,475 | 1,681 | ||||||
Total noncurrent assets | 406,352 | 399,645 | ||||||
Total assets | $ | 724,415 | $ | 728,713 |
Liabilities, Mezzanine Equity and Shareholders' Equity | ||||||||
Current liabilities | ||||||||
Accounts payable and accrued expenses | $ | 20,106 | $ | 27,279 | ||||
Fiduciary accounts payable | 1,709 | 2,027 | ||||||
Medical liabilities | 63,698 | 58,725 | ||||||
Income taxes payable | 8,034 | 4,529 | ||||||
Dividend payable | 337 | 271 | ||||||
Finance lease liabilities | 102 | 102 | ||||||
Operating lease liabilities | 3,119 | 2,990 | ||||||
Current portion of long-term debt | 9,500 | 9,500 |
Total current liabilities | 106,605 | 105,423 | ||||||
Noncurrent liabilities | ||||||||
Deferred tax liability | 16,332 | 18,269 | ||||||
Finance lease liabilities, net of current portion | 390 | 416 | ||||||
Operating lease liabilities, net of current portion | 15,583 | 11,373 | ||||||
Long-term debt, net of current portion and deferred financing costs | 230,105 | 232,172 | ||||||
Total noncurrent liabilities | 262,410 | 262,230 | ||||||
Total liabilities | 369,015 | 367,653 | ||||||
Mezzanine equity | ||||||||
Noncontrolling interest in Allied Physicians of California, a Professional Medical Corporation | 157,439 | 168,725 | ||||||
Shareholders' 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, 36,042,761 and 35,908,057 shares outstanding, excluding 17,475,707 and 17,458,810 treasury shares, at March 31, 2020, and December 31, 2019, respectively | 36 | 36 | ||||||
Additional paid-in capital | 161,087 | 159,608 | ||||||
Retained earnings | 35,957 | 31,905 | ||||||
197,080 | 191,549 | |||||||
Noncontrolling interest | 881 | 786 | ||||||
Total shareholders' equity | 197,961 | 192,335 | ||||||
Total liabilities, mezzanine equity and shareholders' equity | $ | 724,415 | $ | 728,713 |
APOLLO MEDICAL HOLDINGS, INC. | ||||||||
CONSOLIDATED STATEMENTS OF INCOME | ||||||||
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA) | ||||||||
Three Months Ended March 31, | ||||||||
2020 | 2019 | |||||||
Revenue | ||||||||
Capitation, net | $ | 140,421 | $ | 71,517 | ||||
Risk pool settlements and incentives | 11,236 | 10,094 | ||||||
Management fee income | 8,815 | 8,997 | ||||||
Fee-for-service, net | 3,427 | 4,081 | ||||||
Other income | 1,206 | 1,069 | ||||||
Total revenue | 165,105 | 95,758 | ||||||
Operating expenses | ||||||||
Cost of services | 144,204 | 83,432 | ||||||
General and administrative expenses | 11,834 | 10,264 | ||||||
Depreciation and amortization | 4,702 | 4,418 | ||||||
Provision for doubtful accounts | — | 951 | ||||||
Total expenses | 160,740 | 99,065 | ||||||
Income (loss) from operations | 4,365 | (3,307 | ) | |||||
Other income (expense) | ||||||||
Income (loss) from equity method investments | 2,054 | (850 | ) | |||||
Interest expense | (2,868 | ) | (211 | ) | ||||
Interest income | 929 | 323 | ||||||
Other income | 102 | 187 | ||||||
Total other income (expense), net | 217 | (551 | ) | |||||
Income (loss) before provision for (benefit from) income taxes | 4,582 | (3,858 | ) | |||||
Provision for (benefit from) income taxes | 1,595 | (1,408 | ) | |||||
Net income (loss) | 2,987 | (2,450 | ) | |||||
Net loss attributable to noncontrolling interest | (1,065 | ) | (2,590 | ) | ||||
Net income attributable to Apollo Medical Holdings, Inc. | $ | 4,052 | $ | 140 | ||||
Earnings per share – basic | $ | 0.11 | $ | — | ||||
Earnings per share – diluted | $ | 0.11 | $ | — | ||||
Weighted average shares of common stock outstanding – basic | 36,010,268 | 34,496,622 | ||||||
Weighted average shares of common stock outstanding – diluted | 37,439,099 | 38,074,174 |
APOLLO MEDICAL HOLDINGS, INC. | ||||||||
SUPPLEMENTAL INFORMATION | ||||||||
Capitated Membership (in thousands) | ||||||||
March 31, 2020 | December 31, 2019 | December 31, 2018 | ||||||
MSO | 514 | 421 | 665 | |||||
IPA | 543 | 530 | 265 | |||||
ACO | 30 | 29 | 30 | |||||
Total lives under management | 1,087 | 980 | 960 |
Reconciliation of Net Income to EBITDA and Adjusted EBITDA (in thousands) | ||||||||
Three Months Ended March 31, | ||||||||
2020 | 2019 | |||||||
Net income (loss) | $ | 2,987 | $ | (2,450 | ) | |||
Depreciation and amortization | 4,702 | 4,418 | ||||||
Provision for (benefit from) income taxes | 1,595 | (1,408 | ) | |||||
Interest expense | 2,868 | 211 | ||||||
Interest income | (929 | ) | (323 | ) | ||||
EBITDA | 11,223 | 448 | ||||||
(Income) loss from equity method investments | (2,054 | ) | 850 | |||||
Other income | (102 | ) | (187 | ) | ||||
Provider bonus payments | — | 10,000 | ||||||
Provision for doubtful accounts | — | 951 | ||||||
EBITDA adjustment for recently acquired IPAs | 4,760 | — | ||||||
Adjusted EBITDA | $ | 13,827 | $ | 12,062 |
Guidance Reconciliation of Net Income to EBITDA and Adjusted EBITDA (in thousands) | ||||||||
Year Ending | ||||||||
December 31, 2020 | ||||||||
Low | High | |||||||
Net income | $ | 100,000 | $ | 110,000 | ||||
Depreciation and amortization | 18,000 | 20,000 | ||||||
Provision for income taxes | 30,000 | 31,000 | ||||||
Interest expense | 8,000 | 9,000 | ||||||
Interest income | (1,000 | ) | (3,000 | ) | ||||
EBITDA | 155,000 | 167,000 | ||||||
Income from equity method investments (1) | (95,000 | ) | (94,000 | ) | ||||
EBITDA adjustment for recently acquired IPAs | 15,000 | 17,000 | ||||||
Adjusted EBITDA | $75,000 | $90,000 |