Apollo Medical adjusts guidance up

 ApolloMed is raising its full-year 2022 guidance, previously disclosed on May 5, 2022, for total revenue, net income, and EBITDA, and reiterating guidance for Adjusted EBITDA as a result of the aforementioned revision to the Adjusted EBITDA calculation. The Company is raising guidance for revenue, net income, and EBITDA as a result of its continued organic growth and more favorable membership mix. Net income and EBITDA include the impact of an Allied Physicians of California, a Professional Medical Corporation's ("APC") investment in a payer partner, which completed an initial public offering to become a publicly traded company in June 2021. As APC's investment is an excluded asset solely for the benefit of APC and its shareholders, any gains or losses as a result of this investment do not affect the net income attributable to ApolloMed and Adjusted EBITDA attributable to ApolloMed. The November 4, 2022 revised net income and EBITDA guidance ranges assume a stock price of the payer partner of $1.05. These guidance ranges based on the Company's existing business, current view of existing market conditions and assumptions for the year ending December 31, 2022. As it relates to the revised Adjusted EBITDA calculation, the Company had expected to be in the upper range of its guidance range prior to the adjustment. With the implementation of the revised calculation, the Company expects Adjusted EBITDA will fall in the lower end of the existing guidance range.

($ in millions)	2022 Guidance Range								2022 Guidance Range
	(as of May 5, 2022)								(as of November 3, 2022)
	Low				High				Low					High
Total revenue	$	1,055.0			$	1,085.0			$	1,095.0					$	1,115.0
Net income	$	38.0			$	57.0			$	50.5					$	67.0
EBITDA	$	81.0			$	111.0			$	107.5					$	133.5
Adjusted EBITDA	$	136.0			$	166.0			$	136.0					$	166.0

 

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:

Brandon Sim, Co-Chief Executive Officer of ApolloMed, stated, "We are very pleased with our performance in the third quarter of 2022, achieving strong profitability and 40% growth on the top line primarily as a result of increased capitation revenues from organic membership growth in our core IPAs, more favorable membership mix, and participation in a value-based care model for the Medicare fee-for-service population. During the period, we also recognized a $48.8 million shared savings settlement for our participation in an ACO model for performance year 2021 ('PY 2021'). Given our ACO's incredible history of outperforming the benchmark, we opted to participate in a higher risk corridor for PY 2021, which would allow us to keep a much higher percentage of the shared savings. As a result, we booked an additional $27.0 million in shared savings and incentives revenues for third quarter 2022. Because of our strong top line performance, we reported solid bottom line results of $26.0 million, or EPS-diluted of $0.56, for the third quarter."

Mr. Sim continued, "We announced two significant developments a few weeks ago and are thrilled to share that we closed on the acquisitions of AAMG and VOMG in October. The AAMG and FYB series of transactions will not only continue to increase ApolloMed's presence in the San Francisco Bay Area, onboarding an incredible team of doctors committed to delivering quality care to their patients while adding over 15,000 managed lives, but it will also enable ApolloMed to assume financial responsibility for a patient's entire care continuum as FYB is a Restricted Knox-Keene licensed health plan. In other words, it enables ApolloMed to recognize a much larger percentage of the premium dollar as revenue for members under risk-bearing arrangements. Along with our continued expansion in Northern California, the acquisition of nine primary care clinics operating as Valley Oaks Medical Group marks ApolloMed's entry into the states of Nevada and Texas. We are looking forward to delivering equitable, high-quality healthcare to underserved populations in these new key geographic markets through our unique care model."

Mr. Sim concluded, "Due to the strong results generated in the first three quarters of the year, we are pleased to be raising our annual guidance ranges for revenue, net income and EBITDA, and expect to end 2022 on a strong note. The VOMG and AAMG-FYB transactions open up several opportunities for ApolloMed over the course of the next several months and years, and we look forward to working closely with the teams at these different organizations. These developments set the stage for an exciting 2023 and beyond, and we are proud to continue empowering independent physicians to successfully participate in value-based care arrangements, allowing them to put their focus on serving patients who need their care."

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