Apollo Medical Holdings, Inc.

Greetings. Welcome to the Apollo Medical Holdings fourth quarter and year-end 2021 financial results conference call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If you'd like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your host, Caroline Son. You may begin.

Thank you, operator. Hello, everyone. Thank you for joining us. The press release announcing Apollo Medical Holdings, Inc.' 's results for the fourth quarter and year ended December 31st, 2021 is available at the investor 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 the Parliament'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 contain 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 31, 2022, 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 pandemic 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 marketing 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's an overview of the company on slide three. On today's call, the company's co-chief executive officer, Brandon Sim, will discuss fourth quarter and year-end 2021 highlights and the latest operational developments. Chief Financial Officer Eric Chin will follow with a review of Apollo Med's results for the year ended December 31, 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 Apollo Med's Co-Chief Executive Officer, Brandon Sim. Please go ahead, Brandon.

Thank you, Caroline. Good afternoon, everyone, and thank you for joining us to discuss Apollo Med's fourth quarter and year-end 2021 results. I'm excited to discuss another milestone year for our company in 2021, during which we made great strides across the business, continued to enable thousands of physicians and healthcare providers through our technology-powered platform, and set the stage for significant growth in 2022. We continue to execute on our mission of making it seamless for all healthcare providers, from primary care to specialists to hospitalists, from independent practices to staff monoclinics, to engage in and excel at delivering value-based care to all populations, especially those which are traditionally underserved. And we're proud of the work we have done to enable all healthcare providers with the flexibility to deliver high-quality care in a way that is tailored to each local community. Reflecting on 2021, the company achieved total revenues of $773.9 million, an increase of 13% from $687.2 million in 2020. We nearly doubled net income attributable to ApolloMed, which came in at $73.9 million for 2021 compared to $37.9 million in the prior year. Diluted EPS for the year was $1.63 per share for the year ended December 31, 2021, which was up 61% from $1.01 per share for 2020. I'll quickly note that these results exceeded our own projections for each of these metrics, once again delivering record numbers for the company. This was primarily driven by organic growth in our existing consolidated IPAs, increased risk pool settlement and incentives revenue, and our continued superior performance in an ACO model for the performance year of 2020. Like some of our peers, we've benefited from tailwinds due to decreased utilization during the pandemic, which we do expect to normalize back to pre-COVID levels in 2022. However, we believe the gains we have made through the use of our technology platform will continue to create efficiencies and improve patient experience, access to care, and staff productivity, dampening the impact of normalized utilization levels. To support our growth plans for 2022 and beyond, we have made several strategic appointments in recent months. We have hired key personnel in strategy, operations, business development, and more to help us bring greater focus to these areas as we aim to grow aggressively over the next few years. It wasn't until a couple of months ago, for example, that we made our first business development team hire, which will enable us to allocate more resources to identifying and evaluating business development opportunities. Our entire management team is fully on board to invest heavily in our current team members and to expand our clinical operations and administrative teams as we move into new regions and continue to recruit mission-driven individuals to create the nation's leading value-based care platform. As a result of this, we do expect our operating expenses to increase in the near term as part of this org-wide investment, but we are confident that this will strengthen our culture, capabilities, and ability to scale rapidly in 2022 and beyond. To that point, I'm excited to announce that we recently appointed Alan Hsu as Chief Growth Officer of ApolloMed. Alan brings over 15 years of finance and operations experience within the healthcare industry to this newly created role, and will be responsible for driving physician recruitment, strategy, and revenue growth for ApolloMed. He most recently served as Vice President of Operations at Optum, where he led managed care operations, IPA strategy, and network development for Southern California. Prior to Optum, he held various healthcare leadership roles, such as VP of M&A and Integration, as well as international new market development for DaVita. We are excited to welcome Alan to our leadership team, and I'm looking forward to working very closely with him to drive growth onto the ApolloMID platform. In addition, we strengthened our board of directors with the addition of two new board members, Weili Dai and J. Lorraine Estades. Weili brings over 25 years of experience in the tech industry as a founder, executive, venture capitalist, and board member, in the technology and digital health industries. We believe that her expertise will be valuable as we continue to grow our technology platform and AI capabilities while executing on our growth strategy. Lorraine brings decades of leadership and experience within the Los Angeles healthcare industry. She currently serves as Chief Executive Officer of Arroyo Vista Family Health Center, nonprofit network of community health centers serving greater Northeast Los Angeles area since 1981. She helped grow Arroyo Vista from a small storefront clinic to a healthcare delivery network of four health centers and a mobile medical clinic serving the healthcare needs of medically underserved families within its local communities as a federally qualified health center. In other operating news, over the course of 2021, we entered into a few strategic partnerships and made several small tuck-in acquisitions that enhanced the ApolloMed Healthcare Delivery Network. either by growing the number of members under capitated arrangements or by bringing ancillary services such as lab and diagnostics work in-network for our contracted physicians and for our members. In December 2021, we announced that our affiliate entered into a definitive agreement to acquire 100% of the fully diluted capitalization of Jade Healthcare Medical Group, a primary and specialty care physicians group of over 350 providers serving Medicaid, Medicare, and commercial members in the San Francisco Bay Area. Jade Health is a risk-bearing organization that has successfully provided culturally competent, linguistically appropriate professional services to members in its local communities since 2016. The transaction will add approximately 13,000 members, primarily located in the city and county of San Francisco and San Mateo County, to Apollo Med's membership under capitated arrangements. We are working to onboard Jade Health and its providers onto our technology and operations platform by the close of the transaction, which is expected to take place by the end of the second quarter of this year. Following the acquisition of Access Primary Care Medical Group in 2021, Jade Health will continue to strengthen Apollo Med's presence in Northern California. Just last month, we also closed on the acquisition of Orma Health, a provider of AI-driven solutions that enables physician groups to transition to and succeed in the delivery of value-based care. We are very excited to have made significant progress in integrating Orma Health's technology platform into that of ApolloMed. As a reminder, Orma's real-time clinical AI platform takes data from multiple sources and utilizes advanced risk stratification models to identify patients for various clinical programs, including RPM, remote patient monitoring, mental health support, chronic disease management, and more. Its clinical platform is also deeply integrated with its proprietary RPM ecosystem, which consists of smart health devices and a suite of technology tools to help manage patients' health. Prior to the acquisition, Orma Health served over 4,000 aligned Medicare beneficiaries in a CMS innovation model and over 2,500 patients in California, Nevada, Arizona, and Texas through its remote patient monitoring platform. I'm excited to share that shortly after joining ApolloMed, Orma Health has seen a significant increase in demand for its products and today serves over 40,000 Medicare fee-for-service patients on its analytics platform and over 2,700 active members on its RPM platform, which is growing at approximately 10% month-over-month. We continue to see Orma as a key growth lever within our Medicare fee-for-service business in this coming year and beyond, driven by its ability to further augment our existing technology boost organic growth, and deliver deeper, more actionable insights to enable our providers to succeed at value-based care and all CMMI programs. Lastly, we have seen an acceleration of organic growth over the last few months in core new regions. Our team has been working extremely hard to ensure that our patients receive the highest quality care, and we're seeing the word spread within our core markets as we saw more than 9% growth during the latest annual enrollment period in those regions. In conjunction, we continue to integrate our management platform with our recently acquired businesses, for which we're seeing early indications of success through the normalization of margins towards what we see in our core markets. Additionally, due to our strong track record in managed care and success participating in CMMI programs, we have received a lot of inbound interest from provider groups and healthcare organizations in new regions looking to join the ApolloMID platform. Citing our robust suite of tech-enabled solutions, as a key differentiator among other value-based care platforms. Within the last few months, we've already added over 200 providers and 4,500 members in new regions and have a strong pipeline of groups and late-stage discussions eager to join the platform. With that, I'll turn it over to Eric, our CFO, to review our financial results.