Astrana Health Inc. · NASDAQ:ASTH
Astrana Health — Apollo Medical Holdings — Investor Presentation (January 2024)
42 slides from Astrana Health's investor presentation, Jan 10, 2024
Slide 1: Apollo Medical Holdings January 2024
Apollo Medical Holdings January 2024 Powered by Technology. Built by Doctors. For Patients.
Slide 2: Forward-looking Statements
Forward - looking Statements This presentation contains forward - looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 , Section 27A of the Securities Act and Section 21E of the Exchange Act. Forward - looking statements include any statements about the Compa
Slide 3: ApolloMed at-a-glance
ApolloMed at - a - glance 3 ApolloMed is a healthcare platform that organizes and enables providers to drive accessible , high - quality , and high - value care for all patients through a provider - centric, technology - empowered approach The three segments of our proven business model are: 10k+ Pr
Slide 4: The ApolloMed model
The ApolloMed model 4 • We successfully serve our communities by building broad networks of affiliated Primary and Specialist providers and supplementing them with our employed providers • Our flexible model meets all patients across all care settings 1 Includes contracted and employed providers in
Slide 5: The ApolloMed model transforms the status quo into a coordinated, high-value ecosystem
5 The ApolloMed model transforms the status quo into a highly coordinated, high - value, accessible healthcare ecosystem CLINICAL AND COORDINATED CARE SOLUTIONS TECHNOLOGY SUITE SOLUTIONS PAYER AND ADMINISTRATIVE SOLUTIONS Care Enablement Through our flexible approach, we plan to continue organizing
Slide 6: Our flexible model optimizes delivery of accessible, high-quality, high-value care
Our flexible model optimizes delivery of accessible, high - quality, high - value care 6 + ~20 Others Care Partners Care Enablement TECHNOLOGY SUITE SOLUTIONS CLINICAL & COORDINATED CARE SOLUTIONS PAYER AND ADMINISTRATIVE SOLUTIONS Ops Automation VBE 1 Suite & Data Lake Point of Care Tools Analytics
Slide 7: Care Partners: High-performing network of aligned provider partners
Care Partners : High - performing network of aligned provider partners 7 • Acts as a “single payer” for our network of providers, enabling VBC arrangements (i.e., full - risk contracts) • Serves all patients, including Medicare FFS, Medicare Advantage, Medicaid, Commercial and Exchange • Enables con
Slide 8: Care Delivery: Extensive, high-quality network of employed providers
8 Note: See “Use of Non - GAAP Financial Measures“ slide for more information 1 As of the TTM period ending September 30, 2023; ApolloMed standalone data (does not pro forma for CFC acquisition) Care Delivery : Extensive, high - quality network of employed providers • Primary care, multispecialty ca
Slide 9: Care Enablement: End-to-end integrated clinical, operational, financial platform
9 Note: See “Use of Non - GAAP Financial Measures“ slide for more information 1 Includes contracted and employed providers in our provider network, across all specialties, and including both Consolidated a nd Managed providers 2 As of the TTM period ending September 30, 2023; ApolloMed standalone da
Slide 10: Diverse member base served by experienced provider network
29% 36% 23% 11% 1% < 18 yrs 18 - 45 yrs 45 - 65 yrs 65 - 85 yrs 85+ yrs ApolloMed's diverse member base is served by its experienced and loyal provider network through all stages of life 10 Diverse patient demographic 96% Total members in full - risk or partial risk arrangements 2 Significant risk -
Slide 11: Proprietary, purpose-built technology platform leveraging 35+ years of clinical data
Our proprietary & purpose - built technology platform leverages 35+ years of real - world clinical data to drive scalable and repeatable results 11 Note: All images presented are for illustrative purposes only 1 ApolloMed’s Care Team includes MDs, NPs, PAs, RNs, LVNs, etc. 2 SDOH = Social Determinan
Slide 12: Provider network, technology and solutions drive superior clinical outcomes
Our dedicated provider network, technology and solutions platform combine to drive superior clinical outcomes 12 MA 1 ACO 2 Source: Centers for Medicare and Medicaid Services 1 ApolloMed figures based on analysis of Jan - Sept 2023 internal data from all consolidated IPAs in Medicare Advantage 2 202
Slide 13: Strong track record of revenue growth and robust EBITDA profile
Revenue We have a strong track record of revenue growth and a robust EBITDA profile 13 2020 - 2021 Adj. EBITDA benefitted from tailwinds of lower utilization during the COVID - 19 pandemic Return to pre - pandemic utilization in 2022 and 2023 $561 $687 $774 $1,144 $1,340 - $1,390 ($ in millions) 201
Slide 14: Multi-pronged growth strategy
Advance Contracts Across Risk Spectrum • Migrate member lives under partial - risk contracts into full - risk and total cost of care arrangements Our multi - pronged growth strategy positions ApolloMed to capture significant embedded upside Grow Within Existing Markets • Continue to enhance core Sou
Slide 15: Significant whitespace to expand footprint in core market
We have significant whitespace to continue expanding our footprint in our core market… 15 1 California Source: U.S. Census Bureau, population data as of 2022; CMS 1 County population data as of 2022 2 Reflects the MCR improvement from 2019 to Q3 YTD 2023 3 Reflects MCR improvement from 2021 to Q3 YT
Slide 16: Build out recently entered markets to diversify outside California
… and will continue to look for opportunities to build out recently entered markets to further diversify outside of California 16 Nevada Texas Source: U.S. Census Bureau; population data as of each respective year; Centers for Medicare and Medicaid Services, Office of th e Actuary, National Health S
Slide 17: Predictable unit economics
Note: See “Use of Non - GAAP Financial Measures“ slide for more information 1 Membership by risk contract type is not pro forma for the acquisition of CFC 2 Includes ~45% Institutional Capitation payments, covering downstream medical spend for Hospitals / Facilities 3 “Cost of care” includes payment
Slide 18: Advancing contracts across the risk spectrum
Advancing our contracts across the risk spectrum allows us to better deliver whole - person care and drives outsized economics 18 Patient Mix Revenue Mix Full Risk Other • Substantial opportunity exists to drive embedded platform value through advancing contracts across the risk spectrum • ApolloMed
Slide 19: Care Enablement clients provide acquisition pipeline, like Community Family Care
Care Enablement clients provide a pipeline of potential acquisition targets, like Community Family Care 19 • Unique network of providers focused on Medicaid strengthens our ability to reach underserved populations • Highly attractive synergy opportunities: o Ability to capture full unit economics o
Slide 20: Reiterating 2023E Guidance
Reiterating 2023E Guidance 20 Total Revenue $1,144.2 $1,340.0 - $1,390.0 Adjusted EBITDA 1 $140.0 $135.0 - $150.0 EPS - Diluted $0.99 $1.10 - $1.20 ($ in millions, except for per share information) Actual YE 2022 Results 2023 Guidance Range 1 See “Reconciliation of Net Income to EBITDA and Adjusted
Slide 21: Experienced, mission-driven management team
21 Experienced, mission - driven management team with deep clinical knowledge and a proven ability to execute Kenneth Sim, MD Thomas Lam, MD, MPH Brandon Sim, MS Chan Basho, MBA Jeremy Jackson, MD Executive Chairman Co - Chief Executive Officer & President Co - Chief Executive Officer Chief Strategy
Slide 22: Key takeaways
Key takeaways 22 Note: For more information, see “Reconciliation of Net Income to EBITDA and Adjusted EBITDA” and “Use of Non - GAAP Financial Meas ures“ slides for more information 1 Across all consolidated ApolloMed IPAs for Medicare Advantage as of 09/30/2023 , benchmarks derived from CMS data 2
Slide 23: Astrana
* ., Astrana * *
Slide 24: Appendix
Appendix 6) apollomed
Slide 25: Highly differentiated, scaled platform is a leader in value-based care
Highly differentiated, scaled platform is a leader in value - based care 25 Business Model Serves All Patient Types Track Record of Care Delivery Majority (8) Revenue in VBC Affiliate provider model 508K (3) 25 $4,191M $17M O O P 7 Years Affiliate and owned provider model ~900K (1) 30+ $1,328M $141M
Slide 26: Diversified mix of businesses and payer types
We serve a highly diversified mix of businesses and payer types 26 Revenue by Line of Business 63% 20% 12% 5% Medicare Medicaid Commerical Other Third Parties 87% 5% 3% 4% 1% Capitation, net Risk Pool Settlements & Incentives Management Fee Income Fee-for-service, net Other Income 6% 90% 4% Full-ris
Slide 27: Q3 2023 performance highlights; Updated 2023E Guidance
Q3 2023 performance highlights; Updated 2023E Guidance 27 Total Revenue $1,144.2 $1,340.0 - $1,390.0 Net Income 1 $45.7 $59.5 - $71.5 EBITDA 1,2 $110.1 $114.5 - $129.5 Adjusted EBITDA 2 $140.0 $135.0 - $150.0 EPS - Diluted $0.99 $1.10 - $1.20 Q3 2023 financial results ($ in millions, except for per
Slide 28: Q3 2023 operational highlights
Q3 2023 operational highlights 28 • Acquisition of Community Family Care and integration into Care Partner segment while continuing to leverage our Care Enablement platform; two part close expected to occur ; anticipated Q1 2024 • Advantage Health Network joins Care Partners business while continuin
Slide 29: Updated 2023 Guidance
Updated 2023 Guidance 29 2023 Guidance (Original) 2023 Guidance (Updated) Low High Low High Total Revenue 1,300,000 1,500,000 1,340,000 1,390,000 Net Income 49,500 71,500 59,500 71,500 EBITDA 89,500 129,500 114,500 129,500 Adj. EBITDA 120,000 160,000 135,000 150,000 EPS - Diluted $0.95 $1.20 $1.10 $
Slide 30: Illustrative conversion of a third-party Care Enablement client to a Care Partner
$3.9 $3.9 $23.4 $27.3 Pre-Ownership Post-Ownership Care Partners Care Enablement Revenue Illustrative conversion of a Third - Party Care Enablement client to a Care Partner 30 Note: See “Use of Non - GAAP Financial Measures“ slide for more information 1 Illustrative analysis assumes a Care Enablemen
Slide 31: Summary of Selected Financial Results
31 Summary of Selected Financial Results Three Months Ended September 30, Nine Months Ended September 30, $ in 000s except per share data 2023 2022 (restated) 2023 2022 (restated) Revenue Capitation, net $ 305,678 $ 227,571 $ 906,430 $ 677,253 Risk pool settlements and incentives 15,022 64,849 48,60
Slide 32: Segment Results
32 Segment Results $ in 000s Care Partners Care Delivery Care Enablement Other Intersegment Elimination Corporate Costs Consolidated Total Total revenues $ 326,499 29,261 36,910 294 (44,791) - 348,173 % change vs prior year quarter 11% 18% 22% 10% Cost of services 279,769 25,647 13,658 76 (43,775) -
Slide 33: Balance Sheet Highlights
33 Balance Sheet Highlights $ in millions 09/30/2023 12/31/2022 $ Change Cash and cash equivalents and investments in marketable securities 1 $277.0 $293.6 ($16.6) Working capital $273.3 $279.5 ($6.2) Total stockholders’ equity $593.7 $542.6 $51.1 1 Excluding restricted cash
Slide 34: Reconciliation of Net Income to EBITDA and Adjusted EBITDA
34 Reconciliation of Net Income to EBITDA and Adjusted EBITDA 1 Other, net for the three and nine months ended September 30, 2023 relates to transaction costs incurred for our investments and tax restructuring fees and non - cash changes related to change in the fair value of our financing obligatio
Slide 35: Reconciliation of Net Income to EBITDA and Adjusted EBITDA (cont'd)
35 Reconciliation of Net Income to EBITDA and Adjusted EBITDA (cont’d) 1 See “Use of Non - GAAP Financial Measures” slide for more information; 2 Other, net for TTM ended September 30, 2023, relates to transaction costs incurred for our investments and tax restructuring fe es and non - cash changes
Slide 36: Reconciliation of Net Income to EBITDA – Community Family Care
36 Reconciliation of Net Income to EBITDA – Community Family Care 1 Other is comprised of realized and unrealized gains and losses from investments Year Ended December 31, $ in millions 2019 2023E Net income $ 7.8 $ 25.6 Income taxes 0.1 0.3 Depreciation and amortization 0.0 0.0 Interest expense (in
Slide 37: Guidance Reconciliation of Net Income to EBITDA and Adjusted EBITDA
37 Guidance Reconciliation of Net Income to EBITDA and Adjusted EBITDA Note: See “Use of Non - GAAP Financial Measures” slide for more information. 2023 Guidance range (as of November 7, 2023) 2023 Guidance range (as of February 23, 2023) $ in 000s Low High Low High Net income $ 59,500 $ 71,500 $ 49
Slide 38: Summary of Selected Financial Results – Breaking Out Excluded Assets
38 Summary of Selected Financial Results – Breaking Out Excluded Assets Nine Months Ended September 30, 2023 Nine Months Ended September 30, 2022 $ in millions ApolloMed Consolidated Excluded Assets ApolloMed Assets ApolloMed Consolidated Excluded Assets ApolloMed Assets Revenue Capitation, net $ 90
Slide 39: Balance sheet with excluded assets breakout (assets)
September 30, 2023 December 31, 2022 $ in millions ApolloMed Consolidated Excluded Assets ApolloMed Assets ApolloMed Consolidated Excluded Assets 1 ApolloMed Assets Current assets Cash and cash equivalents $ 273.9 11.6 262.3 $ 288.0 30.2 257.8 Investments in marketable securities 3.0 0.5 2.5 5.6 4.5
Slide 40: Balance sheet with excluded assets breakout (liabilities)
September 30, 2023 December 31, 2022 $ in millions ApolloMed Consolidated Excluded Assets ApolloMed Assets ApolloMed Consolidated Excluded Assets 1 ApolloMed Assets Current liabilities Fiduciary payable, accounts payable and accrued liabilities $ 59.4 2.3 57.1 $ 57.7 2.8 54.9 Medical liabilities 97.
Slide 41: Cash flows from operating activities
September 30, 2023 September 30, 2022 $ in millions ApolloMed Consolidated Excluded Assets ApolloMed Assets ApolloMed Consolidated Excluded Assets ApolloMed Assets Cash flows from operating activities Net income $ 57.9 (5.0) 63 $ 46.6 (16.0) 62.6 Adjustments to reconcile net income to net cash provi
Slide 42: Cash flows from investing activities
September 30, 2023 September 30, 2022 $ in millions ApolloMed Consolidated Excluded Assets ApolloMed Assets ApolloMed Consolidated Excluded Assets ApolloMed Assets Cash flows from investing activities Payments for business and asset acquisitions, net of cash acquired $ (4.7) - (4.7) $ (5.6) (4.8) (0
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