Apollo Medical Holdings, Inc.

Good day, ladies and gentlemen, and welcome to the Apollo Medical Holdings second quarter 2021 financial results call. All lines have been placed on a listen only mode and the floor will be open for questions and comments following the presentation. If you would like to enter the queue for questions, please hit star one on your telephone keypad. At this time, it is my pleasure to turn the floor over to your host, Caroline Stone. Ma'am, the floor is yours.

Thank you, Operator, and hello, everyone. Thank you for joining us. The press release announcing Apollo Medical Holdings, Inc.' 's results for the second quarter ended June 30, 2021, is available at the Investors section of the company's website at www.apollomed.net. To provide some additional background on its results, the company has made a supplemental deck available on its website. A replay of this broadcast will also be made available at Apollo Med's website after the conclusion of this call. Before we get started, I would like to remind everyone that this conference call and any accompanying information discussed herein contains certain forward-looking statements within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terms such as anticipate, believe, expect, future, plan, outlook, and will, and include, among other things, statements regarding the company's guidance for the year ending December 31st, 2021. continued growth acquisition strategy, ability to deliver sustainable long-term value, ability to respond to the changing environment, operational focus, strategic growth plans, and merger integration efforts, as well as the impact of the 2020 novel coronavirus or COVID-19 pandemic and the Delta variant on the company's business, operations, and financial results. Although the company believes that the expectations reflected in its forward-looking statements are reasonable as of today, those statements are subject to risks and uncertainties that could cause the actual results to differ dramatically from those projected. There can be no assurance that those expectations will prove to be correct. Information about the risks associated with investing in ApolloMed is included in its filings with the Securities and Exchange Commission, which we encourage you to review before making an investment decision. The company does not assume any obligation to update any forward-looking statements as a result of new information, future events, changes in market conditions, or otherwise, except as required by law. Regarding the disclaimer language, I would also like to refer you to slide two of the conference call presentation for further information. For those of you following along with the accompanying supplement, there is an overview of the company on slide three. On today's call, the company's executive chairman and co-CEO, Dr. Kenneth Sim, will provide an overview of second quarter and first half 2021 highlights. The company's chief operating officer and chief technology officer, Brandon Sim, will then discuss the latest operational developments, and chief financial officer, Eric Shin, will follow with a review of ApolloMed's results for second quarter and first half of 2021. Brandon will conclude the remarks with an update on the company's outlook and long-term growth strategy before opening the floor for questions. With that, I'll turn the call over to ApolloMED's Executive Chairman and Co-CEO, Dr. Kenneth Simms. Please go ahead, Dr. Simms.

Thank you, Carolyn. Good afternoon to all of you, and thank you for joining us to discuss ApolloMED's second quarter 2021 results. ApolloMED continued the positive momentum generated at the beginning of the year into the second quarter, delivering continued solid growth on the top line and even greater growth on the bottom line. This was primarily driven by revenue growth across nearly all our businesses and operational efficiencies derived from our proprietary technology platform, which Brendan will elaborate on later in our call. Organic membership growth in our existing IPAs fueled capitation revenue, which represents the bulk of our total revenue. We also recognized increased risk pool and incentive revenues from our quality and value-based care efforts as well as from decreased utilization at our partner hospitals related to the pandemic. Fee-for-service revenue also increased in the second quarter as a result of increased utilization at our surgery and heart centers following their reopening this year. And while OpEx did increase overall in Q2, primarily due to fees incurred related to our debt refinancing, we continued to see our technology platform drive operational efficiencies internally, realizing approximately a million dollars in savings in general and administrative expenses in this quarter. For the second quarter of 2021, we reported $175.6 million in total revenue, which is a 6% increase from $165.2 million in the prior year period. On the bottom line, net income attributable to ApolloMet was $12.7 million, which is an increase of 80% from $7 million in the prior year period. Diluted earnings per share was up 47% to $0.28 per share for the quarter. Zooming out to the first six months ending June 30, 2021, we achieved a 6% increase in total revenue, reporting $351.7 million for the period, and more than doubling net income attributable to ApolloMED, reporting $25.8 million. diluted earnings per share increased by 93% to 58 cents per share for the first half of 2021. During our first quarter earnings call, we discussed the trend of decreased utilization brought on by the COVID-19 pandemic, which has ultimately had a positive impact on our business with savings realized due to decreased claims expenses. While we did see utilization increase during the second quarter of 2021, we have not yet reached the pre-pandemic levels of utilization due to the added uncertainty introduced by the Delta variant over the past few months. We continue to believe the ongoing impact of COVID-19 will dissipate and eventually normalize over time. Even as this occurs, We remain confident in our abilities to execute our model, having improved the top and bottom lines relative to prior year periods. Based on these trends, our continued organic growth and encouraging results in the first half of the year, we are raising our guidance for fall year 2021. Brandon will provide more detail on our updated guidance during his discussion of outlook and growth strategy. It has been a busy couple of months here in Apollo Med. In June, we entered into an agreement to purchase Sun Clinical Laboratories, which is a clear, certified, full-service laboratory operating in 19 locations in Southern California. Sun Lab gives us the added capacity are providing rapid COVID testing and genetic testing for our patients. We also completed a successful debt refinancing, which puts us in an even stronger financial position and provide us with greater flexibility to execute on a growth strategy. Most recently, we announced that our affiliate has entered into a definitive agreement to acquire 80% of the fully diluted capitalization of an IPA, Access Primary Care Medical Group, which primarily serves senior members in the Northern California counties of San Mateo and San Francisco. We've been working with Access Primary Care as their MSO since 2016, and we are thrilled to be expanding our partnership with them. I would like to thank our team providers and all frontline workers across the country for their continued heroic efforts to meet the COVID challenges. We are proud to continue working for and with all of you. It truly has been an honor to be a healthcare provider during these difficult times. With that, I will turn it over to Brandon, who will elaborate on all of these recent developments and provide an update on our proprietary technology solutions. Brandon.