Apollo Medical Holdings, Inc.

Greetings. Welcome to Apollo Medical Holding fourth quarter and year-end 2022 financial results. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. 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 Caroline Shawn with the Equity Group. Thank you. You may begin.

Thank you, Operator, and 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, 2022 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 Security 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, 2023, 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 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 co-chief executive officer, Brandon Sim, will discuss fourth quarter and year-end 2022 highlights and the latest operational developments. Interim chief financial officer, Sean Basho, will follow with a review of appellant's results for the year, and the quarter ended December 31, 2022. 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 Apollonix Co-Chief Executive Officer, Brandon Zinn. Please go ahead, Brandon.

Thank you, Caroline, and good morning, everyone. Thank you for joining us on our year-end 2022 earnings call today. 2022 was another exciting year for our company as we continued to deliver industry-leading clinical outcomes and healthcare experiences for our members. We achieved strong financial performance and continued to scale the business rapidly while also retaining a balanced approach towards profitability. We executed against our operational strategy in three key ways. One, growing our membership in core and new geographies. Two, moving members along the risk ladder towards global risk value-based contracts. And three, enabling our providers to deliver excellent patient outcomes in order to manage that risk effectively. And finally, we completed several strategic transactions that we believe will support that growth strategy for years to come. First, I'd like to summarize our strong financial results for the year. For the quarter ended December 31st, 2022, we recorded total revenue of 294.2 million, an increase of 51% from 195.1 million for the prior year quarter, and adjusted EBITDA of 23.7 million, an increase of 54% from $15.4 million for the prior year quarter. For the full year of 2022, Apollo met achieve total revenues of over $1.14 billion, an increase of 48% year-over-year, and adjusted EBITDA of $140 million, up 5% year-over-year, yielding an adjusted EBITDA margin of 12.2%, which is within our long-term target EBITDA range of 10% to 20%. This was despite headwinds due to a return to normalcy in terms of utilization and increased costs due to our investments in growth and infrastructure. Next, I'll briefly summarize key operational updates in the areas I mentioned earlier. Firstly, we continue to see strong organic growth in revenues from our risk-bearing provider networks and their core and new geographies. Excluding any restricted Knox Keene-related impacts, which I'll discuss later, We view our core consolidated affiliated provider network business continuing to grow in the team's percentage points year over year. During 2022, we also completed the acquisition of two physician groups based out of Northern California, Jade Healthcare Medical Group and All American Medical Group, which in aggregate will add over 20,000 Medicare, Medicaid, and commercial members to our risk-bearing platform in the San Francisco Bay Area. We continue to bolster the wide-ranging capabilities of our primary and multispecialty care delivery affiliate network via our network of 28 owned primary multispecialty and ancillary care delivery centers. And we see strong growth on that side of the business as well. For example, Valley Oaks Medical Group, our brand in Nevada and Texas, has grown visits by over 20% since we closed the deal in mid-October of 2022. Secondly, we have also made great strides in terms of our ability to better engage and manage our patients via taking on greater financial responsibility for their total cost of care. We entered into a definitive agreement in late September of 2022 to acquire For Your Benefit, or FYB, an entity which is licensed by the California Department of Managed Health Care as a full-service, restricted-NOx scheme-licensed health plan. We remain on target to close the transaction by the end of the first quarter of 2023, pending regulatory approval. The restricted Nox Keen License, part of the FYB transaction, will allow us to assume full financial responsibility in California, including both professional and institutional risk for our members' medical costs. We believe that this will allow us to deploy our care coordination and management capabilities more effectively for those members. and enhance our demonstrated ability to decrease total cost of care while improving on quality and patient outcomes. We view this as a significant opportunity for both revenue and EBITDA, but we do anticipate the process of assuming this risk level across all our members to be a gradual one, spanning several years. In terms of geographies outside of California, we continue to grow membership while retaining high quality scores in our clinics. As a result, we anticipate being able to enter value-based arrangements outside of California with our payer partners this year. Finally, I'd like to touch on our capabilities in care and medical cost management. We've now fully integrated the capabilities of Orma Health's real-time clinical AI platform, which takes data from multiple sources and utilizes our proprietary risk gratification models to identify patients for various clinical programs that we operate, including remote patient monitoring, chronic care management, and more. This clinical platform is deeply integrated with our own RPM ecosystem, which consists of smart health devices and a suite of technology tools to help manage our patients' health. Since integrating Orma Health, which we acquired just over a year ago, we've been able to strengthen the connected, coordinated, holistic care ecosystem that we are delivering to our patients. This, along with the ongoing development of our internal provider-facing patient-facing and care management tools, and our demonstrated historical success give us confidence to continue succeeding in the elevated risk levels I discussed earlier. In summary, the breadth and depth of our value-based care delivery and value-based enablement platform provide a strong foundation for growth and expansion in 2023 and beyond. I'd like to thank our providers and team members in helping us move closer to our mission of bringing high-quality, value-based care to all. With that, I'll turn it over to John to review our financial results. John?