Astrana Health Inc. · NASDAQ:ASTH
Astrana Health — Apollo Medical Holdings — Investor Presentation (May 2021)
45 slides from Astrana Health's investor presentation, May 18, 2021
Slide 1: Apollo Medical Holdings May 2021
Apollo Medical Holdings (NASDAQ:AMEH) May 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: Company Overview and ApolloMed At-A-Glance
Company Overview Apollo Medical Holdings, Inc. (“ApolloMed”) is a leading physician - centric, technology - powered, risk - bearing healthcare management company. Leveraging its proprietary population health management and healthcare delivery platform, ApolloMed operates an integrated, value - based
Slide 4: US healthcare moving rapidly toward value-based care
Value - based care Fee - for - service CMS, COVID - 19, payer 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 5: Providers recognize 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 6: Leader in value-based care
3270a Leader in value - based care • Most physicians paid via value - based arrangements to discourage waste and incentivize care as early as possible, aligning financial incentives and clinical outcomes • Our NGACO offers high quality care with proven clinical savings Enabler of healthcare provider
Slide 7: We act as a single-payer and assume risk for patient care
We act as a “single - payer” and assume risk for comprehensive patient care Insurance provider Insurance provider Insurance provider Other Payers Primary care provider Specialist services Lab tests Imaging Savings shared with providers, remaining retained as profit • 25+ yrs of operational expertise
Slide 8: Long-term relationships with a diversified payer mix
We have established long - term relationships with a diversified payer mix Average tenure with key payers 8 15 years Contribution from each top payer <15% total net revenue www.apollomed.net
Slide 9: ApolloMed is profitable with attractive unit economics
ApolloMed is profitable with attractive unit economics… www.apollomed.net 9 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 va
Slide 10: Additional value created 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 AMEH …and we consiste
Slide 11: Proven model of consistent growth in members and physicians
In addition to having a proven model of consistent growth across our members and physicians… www.apollomed.net 11 2,500 0 1,500 500 1,000 2,000 780 Members (K) 384 2021E 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 2021E 20
Slide 12: Next-Gen ACO demonstrated sustainable success
Our Next - Gen ACO has demonstrated sustainable success, proving our ability to deliver savings and quality in value - based agreements www.apollomed.net 12 23,177 27,529 30,740 0 10,000 20,000 30,000 40,000 2017 Total Aligned Beneficiaries 2018 2019 0 5 10 15 20 25 30 35 40 45 50 Total Benchmark Ex
Slide 13: 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 13 Better outcomes increases value - based incentive payout and decreases utilization Machine learning models improve with more data Providers suc
Slide 14: Platform enables improved outcomes for members
Platform enables demonstrable improved outcomes for members www.apollomed.net 14 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 Benchmark 274 137 197 Competi
Slide 15: ApolloMed engine driven by proprietary tech platform
ApolloMed engine driven by our proprietary tech platform 15 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 16: Technology drives operational and clinical efficiency
Technology drives operational and clinical efficiency 16 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 >4 million claims with no hu
Slide 17: The Market Opportunity
ApolloMed is at the intersection of provider services and healthcare technology, uniquely positioning it to grow rapidly The Market Opportunity 17
Slide 18: Executing a Clear Growth Strategy
ApolloMed is Executing a Clear Growth Strategy 18 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 19: A Significant Market Opportunity in Provider Services
A Significant Market Opportunity in Provider Services 19 (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 20: Foothold in CA and 9 of top 25 US counties
Although we have established a strong foothold in CA and are already in 9 of the top 25 counties by population in the US… 20 NJ MD Served by ApolloMed IPAs Served by ApolloMed ACO Planned expansion In discussions with other groups confidentially www.apollomed.net
Slide 21: 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 21 Current 2021 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 , Medi
Slide 22: Integration of Acquired IPAs
Integration of Acquired IPAs 22 Allied Pacific IPA acquired for approx. $45M in May 2019 Allied Pacific IPA acquired remaining 75% stake not already held for approx. $7.25M in August 2019 ApolloMed continues to implement processes to fully integrate the IPAs acquired in 2019 into its framework — exp
Slide 23: Strategic Investment in CAIPA MSO – New York
• CAIPA is a leading independent practice association serving the greater New York City area • Provides management, consulting, administrative, and other support services to professional healthcare service providers, including to Chinese American IPA d/b/a Coalition of Asian - American IPA (“CAIPA”)
Slide 24: ApolloMed has unfair 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 and SPAC merger with Jaws
Ticker NASDAQ: AMEH NASDAQ: PRVA NYSE: AGL SPAC merger expected with Jaws Acquisition Corp. (NYSE: JWS) NASDAQ: CLOV NYSE: OSH NASDAQ: ONEM Business Leading physician - centric, technology - powered, risk - bearing healthcare management company Technology - driven, national physician enablement comp
Slide 26: Financial Overview: A History of Profitable Growth
Financial Overview A History of Profitable Growth
Slide 27: Historical Financial Profile
4,000 7,000 2017 2020 384,000 780,000 1,130,000 2014 2017 2020 CAGR: 27% $520 $561 $687 $700 2018 2019 2020 2021* Historical Revenue Growth Consistent Membership Growth Contracted Physicians Growth ($ in millions) (# of physicians) CAGR: 6% * midpoint of 2021 guidance range $10.8 $14.1 $37.9 $40.0 2
Slide 28: Summary of Selected Financial Results
Summary of Selected Financial Results www.apollomed.net 28 $ in 000s except per share data Q1 2021 Q1 2020 Revenue Capitation, net $ 144,740 $ 140,421 Risk pool settlements and incentives 18,010 11,236 Management fee income 8,550 8,815 Fee - for - service, net 3,086 3,427 Other income 1,672 1,206 To
Slide 29: 2021 Guidance
2021 Guidance $ in millions Q2 2021 Guidance Range 2021 Guidance Range Total Revenue $163.0 - $173.0 $690.0 - $710.0 Net Income $6.3 - $12.3 $50.0 - $60.0 Net Income Attributable to ApolloMed $6.5 - $10.5 $35.0 - $45.0 EBITDA (1) $15.6 - $21.6 $95.0 - $105.0 Adjusted EBITDA (1) $20.4 - $24.4 $115.0
Slide 30: 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 Pool Settlements & Incentives - Full and shared risk capitation arrangements with certain health plans , local hospitals and Next Gene
Slide 31: Balance Sheet Highlights
Balance Sheet Highlights 31 $ in millions 3/31/2021 12/31/2020 $ Change % Change Cash and cash equivalents and investments in marketable securities $272.8 $261.2 $11.6 4% Working capital $243.9 $223.6 $20.3 9% Total stockholders’ equity $349.7 $330.9 $18.8 6% www.apollomed.net
Slide 32: Current Capitalization
Current Capitalization 32 Note: Balance sheet data as of 3 /3 1 /202 1 (1) Excludes restricted cash of $65mm. www.apollomed.net (figures in millions, except per share price) Recent Share Price (as of 5/3/2021) $ 30.81 Common Shares Outstanding 55.0 Market Capitalization $ 1,694.6 Plus: Total Bank De
Slide 33: Appendix
Appendix
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 S ervices O rganization (MSO) Leading California IPAs * Managed IPAs ~ 4
Slide 35: Management – A Team of Industry Veterans
Management – A Team of Industry Veterans 35 Executive Chairman & Co - CEO Co - CEO & President Chief Operating Officer & Chief Technology Officer Chief Financial Officer Chief Administrative Officer • Joined AMEH in 2006 • Currently serves as Chairman of Allied Pacific IPA, Chairman of NMM since 201
Slide 36: Service Offerings & 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) Next Generation ACO / Risk Model Management Services Organization (MSO) Commercial EPO Commercial ACO • Network of primary
Slide 37: U.S. Value-Based Landscape – Providers
(Intermountain Healthcare) U.S. Value - Based Landscape – Providers 37 The value - based care landscape continues to broaden as more companies enter the market to take capitation risk directly or assist physicians in the transition to risk - based arrangements. Payer Owned Independent Other • Large
Slide 38: Stellar NGACO Performance in 2019
19.8 13.3 Stellar NGACO Performance in 2019 www.apollomed.net 38 Net shared savings from CMS 37.3 Gross savings generated 19.8 17.5 Cap/risk arrangement 6.5 Provider bonus 13.3 Net shared savings settlement realized in Q3 2020 For the 2019 performance year, APA ACO was among the top 4 NGACOs in the
Slide 39: Reconciliation of Net Income to EBITDA and Adjusted EBITDA
Reconciliation of Net Income to EBITDA and Adjusted EBITDA 39 www.apollomed.net $ in millions Q1 2021 Q1 2020 Net income $ 14.4 $ 3.0 Interest expense 1.5 2.8 Interest income (0.3) (0.9) Provision for income taxes 6.8 1.6 Depreciation and amortization 4.2 4.7 EBITDA $ 26.6 $ 11.2 Loss (income) from
Slide 40: TTM EBITDA Reconciliation
TTM EBITDA Reconciliation 40 www.apollomed.net $ in millions Q2 2020 Q3 2020 Q4 2020 Q1 2021 TTM 2021* Net income $ 81.0 $ 25.4 $ 12.9 $ 14.4 $ 133.7 Interest expense 2.7 2.5 1.5 1.5 8.2 Interest income (0.9) (0.8) (0.2) (0.3) (2.2) Provision for income taxes 31.9 10.8 11.9 6.8 61.4 Depreciation and
Slide 41: Guidance Reconciliation of Net Income to EBITDA
Guidance Reconciliation of Net Income to EBITDA and Adjusted EBITDA 41 www.apollomed.net $ in millions Low High Low High Net income $ 6.3 $ 12.3 $ 50.0 $ 60.0 Interest expense 1.5 1.6 8.0 8.5 Interest income (0.3) (0.5) (3.0) (5.0) Provision for income taxes 3.7 3.8 23.0 24.0 Depreciation and amorti
Slide 42: 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 43: Outstanding Shares Explained
(1) The number of weighted average shares used to calculate EPS for the year ended December 31, 2020, was approximately 37.4 mil lion. (2) Based upon information publicly available as of 4/1/2021. Outstanding Shares Explained 43 In December 2020, approx. 5 million of Allied Pacific IPA’s shares of A
Slide 44: Key Acronyms
Key Acronyms 44 ◦ 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 45: Investor Relations 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
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