Q2 2021 Apollo Medical Holdings Inc Earnings Call

August 5, 2021

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Good day, ladies and gentlemen, and welcome to the Apollo Medical Holdings second quarter 2021 financial results call. All lines have been placed on a listen only mode and the floor will be opened for questions and comments. Following the presentation. If you would like to enter the queue for questions. Please hit star 1 on the telephone keypad.

Operator: Good day, ladies and gentlemen, and welcome to the Apollo Medical Holdings Q2 2021 Financial Results Call. All lines have been placed on a listen-only mode, and the floor will be open for questions and comments following the presentation. If you would like to enter the queue for questions, please hit star one on your telephone keypad. At this time, it is my pleasure to turn the floor over to your host, Carolyne Sohn. Ma'am, the floor is yours.

At this time it is my pleasure to turn the floor over to your host Carolyne Sohn ma'am the floor is yours.

Thank you operator, and Hello, everyone. Thank you for joining us the press release announcing of Pollo Medical Holdings, Inc. 's results for the second quarter ended June 32021, it's available at the investors section of the company's website at Www Dot of Pollo Bad Dot net.

Carolyne Sohn: Thank you, operator, and hello, everyone. Thank you for joining us. The press release announcing Apollo Medical Holdings, Inc.'s results for Q2 ended 30 June 2021 is available at the investor 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 ApolloMed'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.

Carolyne Sohn: 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.

Carolyne Sohn: 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 31, 2021, 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 the Delta variant 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.

Carolyne Sohn: 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.

Carolyne Sohn: 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 2 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 3. On today's call, the company's executive chairman and co-CEO, Dr. Kenneth Sim, will provide an overview of Q2 and H1 2021 highlights.

Carolyne Sohn: 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 2 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 3. On today's call, the company's executive chairman and co-CEO, Dr. Kenneth Sim, will provide an overview of Q2 and H1 2021 highlights.

And the changes and the market conditions or otherwise, except as required by law.

Regardless of the disclaimer language I would also like to her for you to fly to 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 that slide 3.

And today's call of the company's executive Chairman and Cozy, Oh Doctor tenants and will provide an overview of second quarter and the first half of 2021 highlights the.

Carolyne Sohn: The company's Chief Operating Officer and Chief Technology Officer, Brandon Sim, will then discuss the latest operational developments, and Chief Financial Officer, Eric Chin, will follow with a review of Apollo Med's results for Q2 and H1 of 2021. 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 Apollo Med's Executive Chairman and Co-Chief Executive Officer, Dr. Kenneth Sim. Please go ahead, Dr. Sim.

And the companies Chief operating Officer, and Chief Technology Officer brand and Sam will then discuss the latest operational development and Chief Financial Officer of Air Chen will follow with a review of of of Parliament. The results for the second quarter and first half of 2021.

Randy and will conclude the remarks with an update on the company's outlook and long term growth strategy for opening the floor of the question with that I'll turn the call over to the Palm and that's executive Chairman and Cozy, Oh Doctor Tennis and go ahead and doctors and.

Kenneth Sim: Thank you, Carolyne. Good afternoon to all of you, and thank you for joining us to discuss ApolloMed's Q2 2021 results. ApolloMed continued the positive momentum generated at the beginning of the year into Q2, delivering continued solid growth on the top line and even greater growth on the bottom line. This was primarily driven by revenue growth across nearly all our businesses and operational efficiencies derived from our proprietary technology platform, which Brandon will elaborate on later in our call. Organic membership growth in our existing IPAs fueled capitation revenue, which represents the bulk of our total revenue. We also recognized increased risk pool and incentive revenues from our quality and value-based care efforts, as well as from decreased utilization at our partner hospitals related to the pandemic.

Thank you for Carolyn good afternoon to all of you and thank you for joining us to discuss a pattern the second quarter of 2020 of when we vote.

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Organic membership growth and our existing.

Kenneth Sim: Organic membership growth in our existing IPAs fueled capitation revenue, which represents the bulk of our total revenue. We also recognized increased risk pool and incentive revenues from our quality and value-based care efforts, as well as from decreased utilization at our partner hospitals related to the pandemic. Fee-for-service revenue also increased in Q2 as a result of increased utilization at our surgery and heart centers following their reopening this year.

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Kenneth Sim: Fee-for-service revenue also increased in Q2 as a result of increased utilization at our surgery and heart centers following their reopening this year. While OpEx did increase overall in Q2, primarily due to fees incurred related to our debt refinancing, we continued to see our technology platform drive operational efficiencies internally, realizing approximately $1 million in savings in general and administrative expenses in this quarter. For Q2 2021, we reported $175.6 million in total revenue, which is a 6% increase from $165.2 million in the prior year period.

Kenneth Sim: While OpEx did increase overall in Q2, primarily due to fees incurred related to our debt refinancing, we continued to see our technology platform drive operational efficiencies internally, realizing approximately $1 million in savings in general and administrative expenses in this quarter. For Q2 2021, we reported $175.6 million in total revenue, which is a 6% increase from $165.2 million in the prior year period. On the bottom line, net income attributable to ApolloMed was $12.7 million, which is an increase of 80% from $7 million in the prior year period.

Kenneth Sim: On the bottom line, net income attributable to ApolloMed was $12.7 million, which is an increase of 80% from $7 million in the prior year period. Diluted earnings per share was up 47% to $0.20 per share for the quarter. Zooming out to H1 ending 30 June 2021, we achieved a 6% increase in total revenue, reporting $351.7 million for the period, and more than doubling net income attributable to ApolloMed, recording $25.8 million. Diluted earnings per share increased by 93% to $0.58 per share for H1 2021.

Kenneth Sim: Diluted earnings per share was up 47% to $0.20 per share for the quarter. Zooming out to H1 ending 30 June 2021, we achieved a 6% increase in total revenue, reporting $351.7 million for the period, and more than doubling net income attributable to ApolloMed, recording $25.8 million. Diluted earnings per share increased by 93% to $0.58 per share for H1 2021. During our Q1 earnings call, we discussed the trend of decreased utilization brought on by the COVID-19 pandemic, which has ultimately had a positive impact on our business, with savings realized due to decreased claims expenses.

Kenneth Sim: During our Q1 earnings call, we discussed the trend of decreased utilization brought on by the COVID-19 pandemic, which has ultimately had a positive impact on our business, with savings realized due to decreased claims expenses. While we did see utilization increase during Q2 2021, we have not yet reached the pre-pandemic levels of utilization due to the added uncertainty introduced by the Delta variant over the past few months. We continue to believe the ongoing impact of COVID-19 will dissipate and eventually normalize over time. Even as this occurs, we remain confident in our abilities to execute our model, having improved the top and bottom lines relative to prior year periods.

During our first quarter earnings call, we discussed the trend of decreased utilization and brought on by the COVID-19 pandemic.

Which has ultimately had a positive impact on our business with savings realized due to decreased claims expenses.

Kenneth Sim: While we did see utilization increase during Q2 2021, we have not yet reached the pre-pandemic levels of utilization due to the added uncertainty introduced by the Delta variant over the past few months. We continue to believe the ongoing impact of COVID-19 will dissipate and eventually normalize over time. Even as this occurs, we remain confident in our abilities to execute our model, having improved the top and bottom lines relative to prior year periods.

While the DC utilization increased during the second quarter of 2021, we have not yet reached the pre pandemic levels of utilization.

Due to the added uncertainty introduced by the Delta of Varian.

Over the past few months.

We continue to believe the ongoing impact of COVID-19 will dissipate and eventually normalize over time.

And even as this occurs.

We remain confident and our ability to execute our model.

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Kenneth Sim: Based on these trends, our continued organic growth, and encouraging results in H1 of the year, we are raising our guidance for full year 2021. Brandon will provide more detail on our updated guidance during his discussion of outlook and growth strategy. It has been a busy couple of months here in ApolloMed. In June, we entered into an agreement to purchase Sun Clinical Laboratories, which is a CLIA-certified full-service laboratory operating in 19 locations in Southern California. Sun Lab gives us the added capacity of providing rapid COVID testing and genetic testing for our patients. We also completed a successful debt refinancing, which puts us in an even stronger financial position and provide us with greater flexibility to execute on our growth strategy.

Based on these trends our continued organic growth and the encouraging results from the first half of the year, we are raising our guidance for full year 2021.

And we will provide more detail on our updated guidance during his discussion of outlook and growth strategy.

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Southern California.

Some of that gives us the other capacity.

Providing rapid COVID-19 testing and genetic testing for our patients.

We also completed a successful debt refinancing, which puts us in even stronger financial position and provide us with greater flexibility to execute on our growth strategy.

Kenneth Sim: We also completed a successful debt refinancing, which puts us in an even stronger financial position and provide us with greater flexibility to execute on our growth strategy. Most recently, we announced that our affiliate has entered into a definitive agreement to acquire 80% of the fully diluted capitalization of an IPA, Access Primary Care Medical Group, which primarily serves senior members in the Northern California counties of San Mateo and San Francisco. We've been working with Access Primary Care as their MSO since 2016, and we are thrilled to be expanding our partnership with them.

Kenneth Sim: Most recently, we announced that our affiliate has entered into a definitive agreement to acquire 80% of the fully diluted capitalization of an IPA, Access Primary Care Medical Group, which primarily serves senior members in the Northern California counties of San Mateo and San Francisco. We've been working with Access Primary Care as their MSO since 2016, and we are thrilled to be expanding our partnership with them. I would like to thank our team, our providers, and all frontline workers across the country for their continued heroic efforts to meet the COVID challenges. We are proud to continue working for and with all of you. It truly has been an honor to be a healthcare provider during these difficult times.

Most recently, we announced that our Cvs has entered into a definitive agreement to acquire the 80% of the fully diluted the capitalization of and IPA access primary care and medical group, which primarily serves senior members and the Northern California counties of San Mateo.

And San Francisco.

<unk> been working with excess Permian cash the Msos since 2016, and we are thrilled to be expanding our partnership with them.

I would like to thank our team provide us and of frontline workers across the country for the continued efforts to meet the Covid challenges. We are proud to continue working for and with all of you the.

Kenneth Sim: I would like to thank our team, our providers, and all frontline workers across the country for their continued heroic efforts to meet the COVID challenges. We are proud to continue working for and with all of you. It truly has been an honor to be a healthcare provider during these difficult times. With that, I will turn it over to Brandon, who will elaborate on all of these recent developments and provide an update on our proprietary technology solutions. Brandon?

The truly has been the honor to be of health care providers. During this difficult times with that I will turn it over to Brendan who will elaborate on all of these recent developments and provide an update on our proprietary technology solutions.

Kenneth Sim: With that, I will turn it over to Brandon, who will elaborate on all of these recent developments and provide an update on our proprietary technology solutions. Brandon?

And.

Thank you Dr. Sam before getting into more detail about several recent developments I'd like to take a minute the frame all of these events at of Parliament.

Brandon Sim: Thank you, Dr. Sim. Before getting into more detail about several recent developments, I'd like to take a minute to frame all of these events at ApolloMed. We are a physician-founded company, and just like our physicians do, we strive to put the patient first and foremost in all that we do. We do this by empowering physicians to participate in and succeed at value-based care arrangements, leveraging our tech-enabled healthcare platform, which serves as an operating system for all participants in the healthcare delivery system, providers, administrators, and coordinators alike. The platform helps to automate and optimize operations so that physicians can focus on providing the best possible care for patients in the most cost-effective way. Although we strive for optimization and efficiency, we do not believe in a one-size-fits-all model.

We are and physician founded company and just like our positions do we strive to put the patient first and foremost and all of that we do.

We do this by empowering physicians to participate and and succeed at value based care arrangements leveraging our tech enabled health care platform, which serves as an operating system for all participants and the health care delivery system providers administrators and coordinators and alike.

The platform helps to automate and.

Brandon Sim: The platform helps to automate and optimize operations so that physicians can focus on providing the best possible care for patients in the most cost-effective way. Although we strive for optimization and efficiency, we do not believe in a one-size-fits-all model. At ApolloMed, we truly believe that healthcare is local and that a care system should be tailored for each community that we serve via integration from a clinical, technological, and financial perspective.

And optimize operations, so that physicians can focus on providing the best possible care for patients and the most cost effective way.

And although we strive for optimization and efficiency, we do not believe and a 1 size fits all model.

And of Parliament, we truly believe that healthcare is local and that the care system should be tailored for each community that we serve via integration from a clinical technological and financial perspective.

Brandon Sim: At ApolloMed, we truly believe that healthcare is local and that a care system should be tailored for each community that we serve via integration from a clinical, technological, and financial perspective. Our proprietary platform allows us to do just that, providing a flexible operating system that can be adapted for each community's optimal use case, while also having a central infrastructure that allows for efficiencies of scale. The same platform is used across all of our businesses, our consolidated IPAs, our managed IPAs, and our ACO, as well as across our entire population, whether it's Medicaid, MA, original Medicare, commercial, or more. I'll also note that the development of this platform was a de novo effort that has been done in an entirely budget-neutral fashion, as demonstrated by our recent financial results. As Dr.

Our proprietary platform allows us to do just that providing of flexible operating system that can be adapted for each community's optimal use case.

Brandon Sim: Our proprietary platform allows us to do just that, providing a flexible operating system that can be adapted for each community's optimal use case, while also having a central infrastructure that allows for efficiencies of scale. The same platform is used across all of our businesses, our consolidated IPAs, our managed IPAs, and our ACO, as well as across our entire population, whether it's Medicaid, MA, original Medicare, commercial, or more. I'll also note that the development of this platform was a de novo effort that has been done in an entirely budget-neutral fashion, as demonstrated by our recent financial results.

And also having a central infrastructure that allows for efficiencies of scale.

The same platform is used across all of our businesses, our consolidated IPA or manage the IPA and our ACM.

As well as the cross our entire population, whether it's Medicaid and May original Medicare commercial or more.

I'll also note that the development of this platform was the de Novo effort that had been done and an entirely budget neutral fashion as demonstrated by our recent financial results.

The doctors and mentioned earlier, we continue to see operational savings driven primarily by continued development of this platform for.

Brandon Sim: As Dr. Sim mentioned earlier, we continue to see operational savings driven primarily by continued development of this platform. For example, we are pleased to state that over 90% of medical claims that we process today in our consolidated IPA business are adjudicated automatically via our platform. We believe that there is further operational margin expansion to come as we continue building out the technology and scaling it across the communities and the physicians that we serve.

Brandon Sim: Sim mentioned earlier, we continue to see operational savings driven primarily by continued development of this platform. For example, we are pleased to state that over 90% of medical claims that we process today in our consolidated IPA business are adjudicated automatically via our platform. We believe that there is further operational margin expansion to come as we continue building out the technology and scaling it across the communities and the physicians that we serve. I'm also very excited to elaborate on some of the expanded partnerships we have established over the course of the past few months, which are examples of the build-out of local integrated care systems that I mentioned earlier. First, we entered into an agreement with Sun Clinical Labs, whereby ApolloMed will serve as exclusive administrator of all daily business functions, excluding lab decisions for Sun Labs.

For example, we're pleased the states that over 90% of medical claims that we process to date and our consolidated IPA business are adjudicated automatically VR platform.

We believe that there is further operational margin expansion to come as we continue building out the technology and scaling it across the communities and the positions that we serve.

Brandon Sim: I'm also very excited to elaborate on some of the expanded partnerships we have established over the course of the past few months, which are examples of the build-out of local integrated care systems that I mentioned earlier. First, we entered into an agreement with Sun Clinical Labs, whereby ApolloMed will serve as exclusive administrator of all daily business functions, excluding lab decisions for Sun Labs. We have been working to integrate their 19 locations into our comprehensive care delivery platform, providing a seamless, best-in-class experience for our affiliated physicians and members.

I am also very excited to elaborate on some of the expanded partnership we have established over the course of the past few months, which are examples of the buildout of local integrated care systems that I mentioned earlier.

First we entered into an agreement with Sun clinical lab.

Whereby Apollo and <unk> will serve as the exclusive administrator of all daily business function, Excluding lab decision for some land.

Brandon Sim: We have been working to integrate their 19 locations into our comprehensive care delivery platform, providing a seamless, best-in-class experience for our affiliated physicians and members. We see Sun Labs as a core partner in our planned expansion, growing the business and bringing high-quality lab services to more patients across the nation. We expect the transaction to close during Q3 of 2021. Last month, we announced our planned acquisition of 80% of the fully diluted capitalization of Access Primary Care Medical Group, a capitated risk-bearing organization that has successfully provided professional services to senior members since 2016. We are very pleased to be bringing Access Primary Care Medical Group’s over 120 primary and specialty care providers serving approximately 1,000 Medicare Advantage members into the ApolloMed family.

Brandon Sim: We see Sun Labs as a core partner in our planned expansion, growing the business and bringing high-quality lab services to more patients across the nation. We expect the transaction to close during Q3 of 2021. Last month, we announced our planned acquisition of 80% of the fully diluted capitalization of Access Primary Care Medical Group, a capitated risk-bearing organization that has successfully provided professional services to senior members since 2016.

Brandon Sim: We are very pleased to be bringing Access Primary Care Medical Group’s over 120 primary and specialty care providers serving approximately 1,000 Medicare Advantage members into the ApolloMed family. We look forward to building upon the success that they have had in delivering value-based care in Northern California. Access Primary Care will provide ApolloMed with a strong foothold in the Bay Area with the opportunity to expand from San Francisco down the peninsula. We also anticipate closing will take place in Q3 2021.

Brandon Sim: We look forward to building upon the success that they have had in delivering value-based care in Northern California. Access Primary Care will provide ApolloMed with a strong foothold in the Bay Area with the opportunity to expand from San Francisco down the peninsula. We also anticipate closing will take place in Q3 2021. We believe that the success we have had in empowering providers in California to participate in value-based care arrangements, and our expertise in building patient-centric local healthcare systems make us uniquely equipped to replicate this model in other states and geographies. I'd like to thank our remarkable ApolloMed team members and our healthcare providers for all the hard work that they do. We look forward to continue serving our local communities in any way that we can. With that, I'll turn it over to Eric to review our financial results.

Brandon Sim: We believe that the success we have had in empowering providers in California to participate in value-based care arrangements, and our expertise in building patient-centric local healthcare systems make us uniquely equipped to replicate this model in other states and geographies. I'd like to thank our remarkable ApolloMed team members and our healthcare providers for all the hard work that they do. We look forward to continue serving our local communities in any way that we can. With that, I'll turn it over to Eric to review our financial results.

Look forward to continue serving our local communities and any way that we can.

With that I'll turn it over to Eric to review our financial results.

Thank you branded.

Eric Chin: Thank you, Brandon. As Dr. Sim mentioned earlier, we achieved strong results in Q2 2021, primarily driven by organic growth, reporting total revenue of $175.6 million, a 6% increase from the $165.2 million in the prior year quarter. We also reported increased risk pool settlements and incentives revenue related to decreased utilization at our partner hospitals when the pandemic first began in 2020, as these revenues from our partner hospitals reflect a 15- to 18-month lag. Our membership remained at approximately 1.1 million managed lives at the end of Q2 ended 30 June 2021. Taking a closer look at our membership, 543,000, or approximately half of our members, were fully capitated through our consolidated IPA.

As darker and mentioned earlier, we achieved strong results and the second quarter of 2021, primarily driven by organic growth reporting total revenue of $175.6 million, a 6% increase from the $165 and $2 million and the prior year quarter.

We also reported increased risk for settlement and incentives revenue related to decrease utilization at our partner hospitals. When the pandemic first began in 2020 as these revenues from our partner hospitals reflect a 15 to 18 month lag.

Our membership remained at approximately 1.1 million manage lives at the end of the second quarter ended June 30th 2021 day.

Eric Chin: Taking a closer look at our membership, 543,000, or approximately half of our members, were fully capitated through our consolidated IPA. Total operating expenses increased about 2% to $154.7 million in Q2 2021 from $152.3 million in the prior year period. This was primarily a result of increased general and administrative expenses related to the debt refinancing, which were partially offset by $1 million in savings realized as a direct result of the company's technology platform.

And closer look at our membership 543000 or approximately half of our members were fully capitated through our consolidated IPA.

Eric Chin: Total operating expenses increased about 2% to $154.7 million in Q2 2021 from $152.3 million in the prior year period. This was primarily a result of increased general and administrative expenses related to the debt refinancing, which were partially offset by $1 million in savings realized as a direct result of the company's technology platform. As a result of the increased net revenue, net income attributable to ApolloMed was $12.7 million, an increase of 80% from $7 million in Q2 2020. Our earnings per share on a diluted basis were $0.28 per share, up 47% from the $0.19 per share in the prior year period.

Total operating expenses increase about 2% to $154.7 million and the second quarter of 2021 for.

$152.3 million and the prior year period.

This was primarily of result of increased general and administrative expenses related to the debt refinancing.

Which were partially offset by $1 million and savings realized as a direct result of the company of technology platform.

As a result of the increased net revenue.

Eric Chin: As a result of the increased net revenue, net income attributable to ApolloMed was $12.7 million, an increase of 80% from $7 million in Q2 2020. Our earnings per share on a diluted basis were $0.28 per share, up 47% from the $0.19 per share in the prior year period. We reported EBITDA of $90 million in Q2 2021, which compares to $119.3 million in the prior year period. Adjusted EBITDA was $30.7 million, which is a 30% increase from the $23.6 million in the prior year period.

Net income attributable to the Apollo med was $12 and $7 million and increase of 80% from $7 million and the second quarter of 2020.

Our earnings per share on of diluted basis, where 28 cents per share of.

Up 47% from the 19 per share and the prior year period.

We reported EBITDA of $90 million and the second quarter of 2021, which compares to $119.3 million and the prior year period.

Eric Chin: We reported EBITDA of $90 million in Q2 2021, which compares to $119.3 million in the prior year period. Adjusted EBITDA was $30.7 million, which is a 30% increase from the $23.6 million in the prior year period. We place greater emphasis on the adjusted EBITDA figures as these numbers back out the impact of recently acquired IPAs, other income, and income from equity method investments. They also back out the impact of excluded assets, which for Q2 2021 included a one-time non-cash unrealized gain of $83.8 million related to the passive investment in a payer partner that completed an IPO during the period.

Eric Chin: We place greater emphasis on the adjusted EBITDA figures as these numbers back out the impact of recently acquired IPAs, other income, and income from equity method investments. They also back out the impact of excluded assets, which for Q2 2021 included a one-time non-cash unrealized gain of $83.8 million related to the passive investment in a payer partner that completed an IPO during the period. This was partially offset by a $15.7 million write-off of the company's beneficial interest in that aforementioned payer partner.

Eric Chin: This was partially offset by a $15.7 million write-off of the company's beneficial interest in that aforementioned payer partner. Our Q2 2020 included a $99.6 million gain on sale of a small health plan called Brand New Day. These gains are in the excluded assets bucket that we've described in the past as they are solely for the benefit of our affiliates, APC, and its shareholders. Now I'll quickly go over a few financial highlights for H1 2021. Total revenue was $351.7 million, up 6% from $330.3 million in the prior year period.

Eric Chin: Our Q2 2020 included a $99.6 million gain on sale of a small health plan called Brand New Day. These gains are in the excluded assets bucket that we've described in the past as they are solely for the benefit of our affiliates, APC, and its shareholders. Now I'll quickly go over a few financial highlights for H1 2021. Total revenue was $351.7 million, up 6% from $330.3 million in the prior year period.

Eric Chin: Total OpEx decreased to $308.9 million from $313 million in the prior year period, primarily as a result of a reduction of claims expenditures incurred at APA ACO and a reduction in G&A expenses due to our technology platform. Net income attributable to ApolloMed increased to $25.8 million for the six months ended 30 June 2021 from $11.1 million for the six months ended 30 June 2020. The increase from the prior year quarter was primarily due to the increased revenues and lower OpEx, as well as increased preferred dividends ApolloMed received from APC. Turning over to the balance sheet, we remain well capitalized and well-positioned to execute on our growth initiatives. As Dr.

Prior year period.

Primarily as a result of a reduction of claims expenditures incurred at a P. A ACO <unk>.

And a reduction and G&A expenses due to our technology platform.

Net income attributable to of Parliament increased to $25.8 million for the 6 months ended June 32021 from.

From $11.1 million for the 6 months ended June 30 of 2020.

The increase from the prior year quarter was primarily due to the increased revenues and lower opex.

As well as increased preferred dividends and Apollo med received from APC.

Turning over to the balance sheet, we remain well capitalized and well positioned to execute on our growth initiatives.

Eric Chin: Turning over to the balance sheet, we remain well capitalized and well-positioned to execute on our growth initiatives. As Dr. Sim mentioned earlier, we completed a debt refinancing this past June as a proactive measure of increasing our ability to invest in growth while reducing our annual interest rate spread by 50 basis points on the initial $180 million drawdown. Increasing our overall financial flexibility with respect to covenants and liquidity.

As Dr. Tim mentioned earlier, we completed a debt refinancing this past June as a proactive measure of increasing our ability to invest and growth, while reducing our annual interest rate spread by 50 basis points on the initial $180 million drawdown.

Eric Chin: Sim mentioned earlier, we completed a debt refinancing this past June as a proactive measure of increasing our ability to invest in growth while reducing our annual interest rate spread by 50 basis points on the initial $180 million drawdown. Increasing our overall financial flexibility with respect to covenants and liquidity. We ended Q2 with $177.3 million in cash and cash equivalents compared to $193.5 million at the end of 2020. Our working capital increased to $342.5 million from $223.6 million at the end of 2020.

And increasing our overall financial flexibility with respect to covenants and liquidity.

We ended the second quarter with $177.3 million and cash and cash equivalents.

Eric Chin: We ended Q2 with $177.3 million in cash and cash equivalents compared to $193.5 million at the end of 2020. Our working capital increased to $342.5 million from $223.6 million at the end of 2020. Lastly, total stockholders' equity increased to $404.6 million at 30 June 2021 from $330.9 million at 31 December 2020.

Compared to $193.5 million at the end of 2020.

Our working capital increased to $342.5 million.

From $223.6 million at the end of 2020.

And lastly, total stockholders equity increased to 400 for $6 million at June 30 of 2021.

Eric Chin: Lastly, total stockholders' equity increased to $404.6 million at 30 June 2021 from $330.9 million at 31 December 2020. Moving further down the balance sheet, total debt at the end of Q2 was $182.7 million. We are safely in compliance with our debt covenants, with consolidated total net leverage ratio of 1.02 times compared to the maximum permitted 3.75 times. Consolidated interest coverage ratio of 21.17 times compared to the minimum permitted 3.25 times. I'd now like to turn it back over to Brandon for a discussion of our growth strategy and outlook for the remainder of 2021. Brandon?

From $339 million.

At December 31, 2020.

Moving further down the balance sheet total debt at the end of the second quarter was $182.7 million.

Eric Chin: Moving further down the balance sheet, total debt at the end of Q2 was $182.7 million. We are safely in compliance with our debt covenants, with consolidated total net leverage ratio of 1.02 times compared to the maximum permitted 3.75 times. Consolidated interest coverage ratio of 21.17 times compared to the minimum permitted 3.25 times. I'd now like to turn it back over to Brandon for a discussion of our growth strategy and outlook for the remainder of 2021. Brandon?

We are safely and compliance with our debt covenants with consolidated total net leverage ratio of 1 point or 2 times.

Third for the maximum permitted 375 times.

And consolidated interest coverage ratio of 21 point 17 time compared to the minimum permitted 3 to 5 times.

I'd now like to turn it back over to brand and for a discussion of our growth strategy and outlook for the remainder of 2021 Brandon.

Brandon.

Thanks, Eric much of.

Brandon Sim: Thanks, Eric. Much of H1 2021 was spent on investing in our platform and infrastructure to allow for rapid scaling going forward without sacrificing on patient care, patient experience, or provider experience. We continue working towards reaching our previously stated goal of growing our member population to approximately 2 million lives by the end of 2021. I'd also like to provide an update on the CAIPA MSO transaction we announced at the beginning of the year, which has taken a little longer to complete than we had initially expected. We continue working closely with the team there and anticipate closing that transaction along with the Access Primary Care transaction in the next few weeks.

The first half of 2021 was spent on investing and our platform and infrastructure to allow for rapid scaling going forward without sacrificing on patient care and patient experience or provider experience.

We continue working towards reaching our previously stated goal of growing our member population to approximately 2 million lives by the end of 2021.

I'd also like to provide and update on the kinds of of MSR transaction, we announced at the beginning of the year, which has taken a little longer to complete and we had initially expected.

Brandon Sim: We continue working closely with the team there and anticipate closing that transaction along with the Access Primary Care transaction in the next few weeks. That said, we are pleased to be raising our previously provided guidance projections for full year 2021 due to the positive trends we are seeing across the business and the strong organic growth and financial results we have achieved thus far in H1 of the year. As listed on slide 11 of our supplement, we now anticipate the following for the year ending December 31, 2021.

We continue working closely with the team there and anticipate closing that transaction along with the access to primary care transaction and the next few weeks.

Brandon Sim: That said, we are pleased to be raising our previously provided guidance projections for full year 2021 due to the positive trends we are seeing across the business and the strong organic growth and financial results we have achieved thus far in H1 of the year. As listed on slide 11 of our supplement, we now anticipate the following for the year ending December 31, 2021. Revenues of between $700 to $720 million. Net income of $56 million to $66 million. Net income attributable to ApolloMed of $48 million to $58 million. EBITDA of $100 million to $119 million. Adjusted EBITDA of $120.5 million to $130.5 million.

That said, we are pleased to be raising our previously provided guidance projections for full year 2020.1 due to the positive trends, we are seeing across the business and the strong organic growth and financial results. We have achieved thus far and the first half of the year.

As listed on Slide 11 of our supplement we now anticipate the following for the year ended ending December 31.2021.

Revenues of between $700 million to $720 million.

Brandon Sim: Revenues of between $700 to $720 million. Net income of $56 million to $66 million. Net income attributable to ApolloMed of $48 million to $58 million. EBITDA of $100 million to $119 million. Adjusted EBITDA of $120.5 million to $130.5 million. Please keep in mind that net income and EBITDA account for a one-time non-cash gain in a passive investment that Eric mentioned earlier, and that we place greater emphasis on the net income attributable to ApolloMed and adjusted EBITDA metrics.

Net income of 56 million to $66 million.

Net income attributable to of Parliament of 48 million to $58 million.

EBITDA of $100 million to $119 million.

And adjusted EBITDA of $128.5 million.

The $135 million.

Please keep in mind that and.

Brandon Sim: Please keep in mind that net income and EBITDA account for a one-time non-cash gain in a passive investment that Eric mentioned earlier, and that we place greater emphasis on the net income attributable to ApolloMed and adjusted EBITDA metrics. In addition, these guidance metrics do not consider any potential acquisitions or other major business transactions we may complete over the course of this year. As any material developments arise, we will be sure to update the markets and reevaluate guidance as appropriate. Before concluding, I'd also like to briefly touch on the increased recognition our stock has received from the investing community over the course of the past several months. The ApolloMed story has perhaps flown under the radar for quite some time, and we are pleased that our recent investments in technology and infrastructure, as well as our continued profitability, are being noticed.

Net income and EBITDA accounts for a onetime non cash gain and the passive investments that Eric mentioned earlier and then we place greater emphasis on the net income attributable to of Parliament and adjusted EBITDA metrics.

In addition, these guidance metrics do not consider any potential acquisitions or other major business transactions. We may complete over the course of this year.

Brandon Sim: In addition, these guidance metrics do not consider any potential acquisitions or other major business transactions we may complete over the course of this year. As any material developments arise, we will be sure to update the markets and reevaluate guidance as appropriate. Before concluding, I'd also like to briefly touch on the increased recognition our stock has received from the investing community over the course of the past several months.

And any material developments arise, we will be sure to update the market and reevaluate guidance as appropriate.

And for.

Before concluding I'd also like to briefly touch on the increased recognition of our stock has received from the investment community over the course of the past several months.

The polymer story has perhaps flown under the radar for quite some time and we're pleased and our recent investments and technology and infrastructure as well as our continued profitability are being noticed.

Brandon Sim: The ApolloMed story has perhaps flown under the radar for quite some time, and we are pleased that our recent investments in technology and infrastructure, as well as our continued profitability, are being noticed. We look forward to continuing a productive dialogue with the investment community and do have a few conference presentations planned for later this year. In summary, we are pleased with our Q2 financial results and are confident in the value proposition of the virtuous cycle we have created on the ApolloMed platform.

We look forward to continuing the productive dialogue with the investment community and do you have a few conference presentations planned for later this year.

Brandon Sim: We look forward to continuing a productive dialogue with the investment community and do have a few conference presentations planned for later this year. In summary, we are pleased with our Q2 financial results and are confident in the value proposition of the virtuous cycle we have created on the ApolloMed platform. We believe we are uniquely equipped to execute on our mission to empower providers as the nation increasingly shifts towards value-based care. We continue to be laser-focused on delivering improved clinical outcomes for our patients at lower cost by eliminating as much excess waste in the system as possible. We are proud to serve all patients in our local communities, and we look forward to serving more in the near future. With that, operator, let's open it up for Q&A.

In summary, we are pleased with our second quarter financial results and are confident and the value proposition of the virtuous cycle. We have created on the polymer platform.

Brandon Sim: We believe we are uniquely equipped to execute on our mission to empower providers as the nation increasingly shifts towards value-based care. We continue to be laser-focused on delivering improved clinical outcomes for our patients at lower cost by eliminating as much excess waste in the system as possible. We are proud to serve all patients in our local communities, and we look forward to serving more in the near future. With that, operator, let's open it up for Q&A.

We believe we are uniquely equipped to execute on our mission to empower providers as the nation increasingly shift towards value based care.

And we continue to be laser focused on delivering improved clinical outcomes for our patients and lower cost by eliminating as much excess waste and the system as possible.

We are proud to serve all patients and our local communities and we look forward to serving more and the near future.

With that operator, let's open it up for Q&A.

Thank you the Florida and I'll open for question and if you do have a question. Please press star 1 on the telephone keypad at the time. Please hold while the please hold while we poll for questions.

Operator: Thank you. The floor is now open for questions. If you do have a question, please press star one on your telephone keypad at this time. Please hold while we poll for questions.

Operator: Thank you. The floor is now open for questions. If you do have a question, please press star one on your telephone keypad at this time. Please hold while we poll for questions. Okay. It doesn't look like we have any questions coming in. I'd like to turn it back over to management for closing remarks.

Okay. It doesn't look like we have any questions coming in and I'd like to turn.

Operator: Okay. It doesn't look like we have any questions coming in. I'd like to turn it back over to management for closing remarks.

And it back over to management for closing remarks.

Okay.

Brandon Sim: Thank you all for your time today. We are always open to a dialogue with investors and welcome visitors to our offices in Alhambra, should any of you be in the Los Angeles area. Please feel free to reach out to us or our investor relations firm, The Equity Group, with any additional questions. We look forward to speaking to you all again on our next quarterly call. Thank you.

Thank you all for your time today, we are always open to a dialogue with investors and welcome visitors to our offices in Alhambra should any of you being in the Los Angeles area.

Please feel free to reach out to us or our Investor relations firm the equity group with any additional questions.

We look forward to speaking to you all again on our next quarterly call.

Thank you.

[Analyst]: Thank you.

Kenneth Sim: Thank you.

Thank you.

Thank you. This concludes the base conference call. We thank you for your participation you may disconnect. The lines at this time and have a great day.

Operator: Thank you. This concludes today's conference call. We thank you for your participation. You may disconnect your lines at this time and have a great day.

Okay.

[music].

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