Astrana Health Inc. · NASDAQ:ASTH
Astrana Health — Apollo Medical Holdings — Investor Presentation (November 2021)
44 slides from Astrana Health's investor presentation, Nov 8, 2021
Slide 1: Apollo Medical Holdings November 2021
Apollo Medical Holdings (NASDAQ: AMEH) November 2021 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 t he Comp
Slide 3: ApolloMed At-A-Glance
Apollo Medical Holdings, Inc. (“ApolloMed”) is a leading physician - centric, technology - powered, risk - bearing healthcare company. Leveraging its proprietary end - to - end technology solutions, ApolloMed operates an integrated healthcare delivery platform that enables providers to successfully
Slide 4: Recent financial and operating highlights
www.apollomed.net 4 Recent financial and operating highlights Generated $57.7M in gross savings, highest dollar amount out of all analogous ACOs in the country • $21.8M impact on top line • $13.1M impact on bottom line Strong Q3 financial results Stellar ACO performance in 2020 Closed the follow
Slide 5: Updated 2021 guidance
Updated 2021 guidance 5 www.apollomed.net $ in millions, except per share information 2021 Guidance Range (as of August 5, 2021) 2021 Guidance Range (as of November 4, 2021) Total Revenue $700.0 - $720.0 $751.5 - $758.5 Net Income (1) $56.0 - $66.0 $81.0 - $83.5 Net Income Attributable to ApolloMed
Slide 6: U.S. healthcare landscape is rapidly moving towards value-based care
Value - based care Fee - for - service CMS, COVID - 19, payor contracting, and focus on quality while lowering total cost are driving shift in healthcare Fee - for - service Value - based care Lack of incentives to improve chronic health conditions Driving a trend of rapidly increasing medical costs
Slide 7: Providers recognize the criticality of value-based care but do not feel equipped
Providers recognize the criticality of value - based care, but do not feel equipped to successfully navigate its complexities Recognize they will need to adopt value based model Indicated collecting and reporting the information for these quality measures is burdensome Would need additional resource
Slide 8: Enables providers to successfully take risk
Enables providers to successfully take risk • We believe that providers are the most suited to drive patient behavior, outcomes, and therefore total cost of care • We enable and onboard providers at scale to succeed in value - based care arrangements , aligning financial and clinical outcomes • Our
Slide 9: We act as a single-payor and assume risk for comprehensive patient care
We act as a “single - payor” and assume risk for comprehensive patient care Insurance provider Insurance provider Insurance provider Other Payors Primary care provider Specialist services Lab tests Imaging Savings shared with providers, remaining retained as profit • 25+ yrs of operational expertise
Slide 10: Long-term relationships with a diversified payor mix
We have established long - term relationships with a diversified payor mix Average tenure with key payors 10 15 years Contribution from any single top payor <15% total net revenue www.apollomed.net
Slide 11: ApolloMed is profitable with attractive unit economics
ApolloMed is profitable with attractive unit economics… www.apollomed.net 11 1 2 3 ApolloMed’s scale, extensive experience in value - based care, and better risk adjustment result in better per member per month payments vs industry standard 1 Our large network of physicians across primary care and v
Slide 12: We consistently create additional value as we grow
Increased capitation due to contracting and risk adjustment Better specialty network cost management Additional service lines Reduced outsourced MSO fees Improved quality of care bonus realization Total improvement potential Shared with physicians Net savings to ApolloMed …and we con
Slide 13: Proven model of consistent growth across members and physicians
In addition to having a proven model of consistent growth across our members and physicians… www.apollomed.net 13 2,500 0 1,500 500 1,000 2,000 780 Members (in thousands) 384 2014 2017 1,130 2020 2,000 20% 77% 1,000 4,000 7,000 10,000 0 2,000 4,000 6,000 8,000 10,000 12,000 Contracted Physicians 201
Slide 14: ACO has demonstrated sustainable success
…our ACO has demonstrated sustainable success, proving our ability to deliver savings and quality in value - based agreements www.apollomed.net 14 23,177 27,529 30,740 29,018 0 10,000 20,000 30,000 40,000 2017 Total aligned b eneficiaries 2018 2019 0 20 40 60 80 100 120 Total benchmark e xpenditures
Slide 15: Provider network and tech platform drive a virtuous cycle
ApolloMed’s large provider network and proprietary tech platform drive a virtuous cycle, powering growth and improving patient outcomes www.apollomed.net 15 Better outcomes increases value - based incentive payout and decreases utilization Machine learning models improve with more data Providers suc
Slide 16: Platform enables demonstrable improved outcomes for members
Platform enables demonstrable improved outcomes for members 16 Medicare All information provided is 2019 data unless otherwise noted. Sources: CMS, Chronic Conditions Data Warehouse (CCW), competitors’ IR, and internal figures Hospital Admits per 1,000 274 137 197 50% fewer ER Visits per 1,000 603 2
Slide 17: ApolloMed engine driven by our proprietary tech platform
ApolloMed engine driven by our proprietary tech platform 17 ApolloMed combines technology and data analytics, powered by machine learning and artificial intelligence, with clinical expertise Technology expertise + = Operational excellence Clinical knowledge Artificial intelligence Machine learning N
Slide 18: Technology drives operational and clinical efficiency
Technology drives operational and clinical efficiency 18 Our solutions address three key pain points in managed healthcare delivery: Automated medical claims adjudication Utilization management automation Population health and provider incentive platform • Have processed over 4 million claims with n
Slide 19: The Market Opportunity
ApolloMed is at the intersection of provider services and healthcare technology, uniquely positioning it to grow rapidly The Market Opportunity 19
Slide 20: ApolloMed is executing a clear growth strategy
ApolloMed is executing a clear growth strategy 20 www.apollomed.net Consolidate additional IPAs and enter new markets and geographies Build on ACO success and participate in additional Innovation Models Continue to invest in technology, preventive care, and automation to further drive clinical care
Slide 21: A significant market opportunity in provider services
A significant market opportunity in provider services 21 (1) Source: CMS.gov – NHE Fact Sheet, physician and clinical services expenditures (2) Source: CHCF.org – California Personal Health Core Spending, 2017 – Quick Reference Guide U.S. serviceable addressable market for provider services Estimate
Slide 22: Foothold in CA and 9 of the top 25 counties
Although we have established a strong foothold in CA and are already in 9 of the top 25 counties by population in the U.S… 22 NJ MD Served by ApolloMed IPAs Served by ApolloMed ACO Planned expansion www.apollomed.net
Slide 23: Pursuing growth in the $3.6T provider services market
…we are actively pursuing growth opportunities to capture greater share of the $3.6T provider services market opportunity 23 Current Near - term Goal ~1.1M Managed lives +500k >2M Managed lives +500k Managed lives in CA Managed lives outside of CA V V Provider services p opulation includes: Medicare
Slide 24: ApolloMed has overwhelming advantages
24 Large and rapidly growing market opportunity in value - based care Profitable & proven model with predictable, attractive unit economics and upside from risk - sharing Scalable and repeatable playbook for hypergrowth Industry - leading technology driven by data moat Flywheel effect that exponenti
Slide 25: Peer comparison
Ticker NASDAQ: AMEH NASDAQ: PRVA NYSE: AGL NYSE: CANO NASDAQ: CLOV NYSE: OSH NASDAQ: ONEM Business Physician - centric, technology - powered healthcare company enabling providers in the successful delivery of value - based care Technology - driven, national physician enablement company that collabor
Slide 26: Financial Overview: A History of Profitable Growth
Financial Overview A History of Profitable Growth
Slide 27: Historical financial profile
Historical financial profile www.apollomed.net 27 $10.8 $14.1 $37.9 $72.5 2018 2019 2020 2021* $520 $561 $687 $755 Historical revenue growth ($ in millions) * midpoint of 2021 guidance range ($ in millions) * midpoint of 2021 guidance range Historical net income attributable to ApolloMed growth 2018
Slide 28: Summary of selected financial results
www.apollomed.net 28 Summary of selected financial results Three Months Ended September 30, Nine Months Ended September 30, $ in 000s except per share data 2021 2020 2021 2020 Revenue Capitation, net $ 149,059 $ 135,032 $ 438,350 $ 416,402 Risk pool settlements and incentives 59,923 30,916 94,146 54
Slide 29: Revenue breakdown
Capitation - Capitated fees for medical services via direct arrangements with managed care providers . Typically pre - paid monthly based on number of enrollees Risk p ool s ettlements & i ncentives - Full and shared risk capitation arrangements with certain health plans , local hospitals and Accoun
Slide 30: Business mix by payor type
www.apollomed.net 30 Business mix by payor type 40% 37% 18% 5% FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2021 (% OF TOTAL REVENUE) Medicare Medicaid Commercial Other Third Parties
Slide 31: Balance sheet highlights
Balance sheet highlights 31 www.apollomed.net $ in millions 9/30/2021 12/31/2020 $ Change % Change Cash and cash equivalents and investments in marketable securities $333.3 $261.2 $72.2 28% Working capital $310.5 $223.6 $86.9 39% Total stockholders’ equity $440.3 $330.9 $109.4 33%
Slide 32: Current capitalization
Current capitalization 32 www.apollomed.net Note: D ata is as of 9 /3 0 /202 1 unless otherwise stated. (1) Excludes restricted cash of $59.1M. (figures in millions, except per share price) Recent Share Price (as of 11/5/2021) $ 85.99 Common Shares Outstanding 55.5 Market Capitalization $ 4,772.4 Pl
Slide 33: Appendix
Appendix 6) apollomed
Slide 34: Organizational overview
Together with our affiliated physician groups and consolidated entities, ApolloMed manages the medical lives of more than 1.1 million members. Consolidated IPAs ~ 558 ,000 member lives* Publicly traded parent company M anagement services organization (MSO) Leading California IPAs * Managed IPAs ~ 48
Slide 35: Management – A team of industry veterans
Management – A team of industry veterans 35 Co - Chief Executive Officer & President Co - Chief Executive Officer Chief Financial Officer Chief Administrative Officer Chief Quality Officer • Joined AMEH in 2005 • AMEH director since 2016 • 15 years as CEO and director of NMM • Chairman & CEO of APC
Slide 36: Our service offerings and revenue model
Across all aspects of care delivery, our offerings provide a steady revenue stream Our service offerings & revenue model 36 Consolidated Independent Practice Associations (IPAs) ACO / Risk Model Management Services Organization (MSO) Commercial EPO Commercial ACO • Network of primary and specialty p
Slide 37: Stellar ACO performance in 2020
13.3 Stellar ACO performance in 2020 www.apollomed.net 37 Earned shared savings 57.7 Gross savings generated 21.8 35.9 Cap/risk arrangement 8.7 Provider bonus 13.1 Net shared savings realized in Q3 2021 For the 2020 performance year, ApolloMed’s ACO was among the top 2 ACOs in the country (out of an
Slide 38: Reconciliation of net income to EBITDA and Adjusted EBITDA
Reconciliation of net income to EBITDA and Adjusted EBITDA 38 www.apollomed.net (1) See “Use of Non - GAAP Financial Measures” slide for more information. ($ in millions) 2021 2020 2021 2020 Net (loss) income $ (5.4) $ 25.4 $ 68.6 $ 109.4 Interest expense 1.0 2.5 4.3 8.0 Interest income (0.4) (0.8)
Slide 39: TTM EBITDA reconciliation
TTM EBITDA reconciliation 39 www.apollomed.net $ in millions Q4 2020 Q1 2021 Q2 2021 Q3 2021 TTM 2021* Net income (loss) $ 12.9 $ 14.4 $ 59.5 $ (5.4) $ 81.4 Interest expense 1.5 1.5 1.9 1.0 5.9 Interest income (0.2) (0.3) (0.5) (0.4) (1.4) Provision for (benefit from) income taxes 11.9 6.8 24.9 (0.1
Slide 40: Guidance reconciliation of net income to EBITDA and Adjusted EBITDA
Guidance reconciliation of net income to EBITDA and Adjusted EBITDA 40 www.apollomed.net ($ in millions) Low High Low High Net income $ 56.0 $ 66.0 $ 81.0 $ 83.5 Interest expense 6.0 8.4 5.0 6.0 Interest income (1.5) (2.4) (1.2) (1.7) Provision for income taxes 24.0 29.0 37.0 38.0 Depreciation and a
Slide 41: Use of non-GAAP financial measures
Use of non - GAAP financial measures This presentation contains the non - GAAP financial measures Earnings Before Interest, Taxes, Depreciation and Amortization (“EBIT DA”) and Adjusted EBITDA, of which the most directly comparable financial measure presented in accordance with GAAP is net (loss) in
Slide 42: Outstanding shares explained
(1) The number of weighted average shares used to calculate EPS for the nine months ended September 30, 2021, was approximate ly 44.4 million. (2) Based upon information publicly available as of 11/5/2021. Outstanding shares explained 42 In December 2020, approx. 5 million of Allied Pacific IPA’s sh
Slide 43: Key acronyms
Key acronyms 43 ◦ ACO: Accountable Care Organization ◦ AIPBP: All - Inclusive Population - Based Payments ◦ APC: Allied Physicians of California IPA ◦ CMMI: Center for Medicare and Medicaid Innovation ◦ CMS: Centers for Medicare & Medicaid Services ◦ DME: Durable Medical Equipment ◦ Health Plan / Pa
Slide 44: For inquiries, please contact
For inquiries, please contact: ApolloMed Investor Relations (626) 943 - 6491 investors@apollomed.net Carolyne Sohn, The Equity Group (415) 568 - 2255 csohn@equityny.com
Apollo Medical Holdings — Investor Presentation (November 2021) on 6ix