Astrana Health Inc.

Greetings. Welcome to the Apollo Medical Holdings First Quarter 2022 Financial Results. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. And at any time, you may press star 1 to join the question queue, and pressing star 2 will remove your question from the queue. If anyone should require operator assistance during the conference, please press star 0 on your telephone keypad. Please note, this conference is being recorded. I will now turn the conference over to your hosts. Caroline Sun of the Equity Group. 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 first quarter ended March 31, 2022. It's 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, 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 or COVID-19 pandemic and other variants 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 first quarter 2022 highlights and the latest operational developments. The company announced this afternoon the appointment of Chief Strategy Officer and Interim Chief Financial Officer, Chan Basho. Chan will provide a review of ApolloMed's results for the first quarter, ended March 31st, 2022, and 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 Co-Chief Executive Officer, Brandon Sim. Please go ahead, Brandon.

Thank you, Caroline. This has been an exciting quarter and I want to start today's call on a personal note. I'm very proud and thankful for the work that each of our provider partners embarks on daily. As some of you may know, my grandparents are both members of ApolloMed. I've seen firsthand just how diligently they have received care as they have gone through some recent care needs. And it has been eye-opening and touching for me to see our technology-powered care delivery model in action from the point of view of a family member. Independent physicians are the backbone of our nation's healthcare delivery system, and we are strongly committed to supporting and enabling them. Our goal here at ApolloMed is to provide inclusive, high-quality care for all individuals within our communities. Today, we have the privilege of serving Medicare Advantage, Managed Medicaid, ACA Exchange, Commercial, and Medicare Fee-for-Service populations. and we look forward to continuing our efforts to advance health equity in all of these populations. Now, historically, independent practices have lacked access to centralized care teams and integrated delivery services. Through our technology-enabled tools, we are changing this paradigm and empowering our partnered physicians to take on risk and manage both their managed care and fee-for-service populations in a proactive manner with the support of Apollo Med's value-based care infrastructure. We believe that this will enhance quality, access to care, and decrease overall cost of care. Now onto the quarter. Strong organic membership growth and favorable membership mix, as well as participation in a value-based care model for the Medicare fee-for-service population, served as the catalyst for top-line growth during the first quarter of 2022, as our capitated revenue grew 53% year over year. We achieved a 50% increase in total revenue reporting $263.3 million for the three months ended March 31st, 2022. We expect that this will continue to be a trend in the remainder of the year as we see a strong tailwind and interest in our unique model from physicians across the country. We did incur operating expenses in Q1 in line with increased revenues as well as some lagging effects of the COVID-19 pandemic on our risk pools. The higher OpEx was also due to increased G&A expense related to share-based compensation and the hiring of additional key personnel and staff to support our operational growth. As a result of our ongoing efforts to build out our team, we incurred an additional $2.2 million in salaries, wages, and benefit expenses as compared to Q1 of 2021. Despite rapid growth and increased investment in people and in infrastructure, We were able to grow net income attributable to ApolloMed by 8.5% to $14.3 million, or a diluted EPS of $0.31 for the quarter. Adjusted EBITDA was $38.2 million, up 25% from $30.5 million in the prior year period. Based on current trends within our business, we are pleased to be raising guidance for the full year of 2022 revenues as well as the bottom end of the ranges for net income EBITDA and adjusted EBITDA. We now anticipate at least 36% growth year-over-year on the top line to between $1.055 to $1.085 billion and adjusted EBITDA of between $136 million and $166 million. Moving on to our operations, last month we closed on the acquisition of Jade Healthcare Medical Group. which we had previously announced in December 2021. Jade Health is a primary and specialty care physician group of over 350 providers, primarily serving Medicaid, Medicare and commercial members in the San Francisco Bay Area. They are a risk bearing organization whose doctors are known for their culturally competent, linguistically appropriate professional services to members of the local community. We continue to work closely with Jade Health leadership and their network of partner providers as we onboard them onto the ApolloMed platform. Our tools will enable the providers to put more of their time and focus on serving the patients in the community and less time on the day-to-day administrative tasks necessary for operating an independent practice in a value-based care setting. We are very pleased to be strengthening our presence in Northern California with the addition of Jade Health and look forward to helping the organization grow while enhancing patient experience in the months and years ahead. Beyond Jade, we have also expanded our provider partner network being managed by Apollo Med subsidiaries in Northern California. We believe we offer a differentiated product in the marketplace for independent physicians and physician groups, and we expect to see strong growth going forward in this area. As we look to the rest of 2022 and into 2023, we are excited to continue deepening our presence in our California markets while also expanding to new regions in New York through a series of acquisitions and partnerships with key provider groups that share our vision of empowering independent physicians. As we go to market with a comprehensive suite of value-based care technologies, with the addition of Orma Health in our tech stack, we are seeing a strong uptick in organic inbound inquiries from IPAs, ACOs, DCEs, and other organizations who are looking to bolster their care and quality analytics and as more physicians look to add remote patient monitoring to their value-based care toolkit. The ORMA business continues to grow active membership, strong, strongly, 23% in the first quarter and has expanded to serve practices in two new states in Q1 of 2022. As I mentioned earlier, we have continued to build out our team here at ApolloMed, particularly in the areas of operations, strategy and business development to support our growth efforts. I'm pleased to welcome Chandan Basho, as our new Chief Strategy Officer. He has also been appointed Interim Chief Financial Officer as Eric has stepped down from the role for personal reasons. Chan brings 15 years of experience in finance, operations, strategy, and corporate development. As Chief Strategy Officer, Chan will lead the development and execution of our overall corporate strategy, along with building and supervising our operating teams. He will be working closely with me and the larger leadership team. Most recently, Chan served as VP of Strategy and Corporate Development at Alignment Healthcare. Prior to Alignment, he was Chief Financial Officer at Alsana, a private equity-backed behavioral health company. He also held roles at Healthcare Partners, a DaVita Medical Group company, where he spearheaded strategy and development for the California market, as well as at DaVita itself, where he led a corporate finance team. Chan is intimately familiar with what we are looking to achieve here at ApolloMed, and we are excited to have him on board. I would like to thank Eric for his many, many contributions to ApolloMed these past few years. He played a very important role in helping our company grow to what it is today, and we wish him all the best in his future endeavors. I would like to turn it over to Eric to say a few words. Thank you, Brandon.