Astrana Health, Inc. Reports Third Quarter 2024 Results

Company to Host Conference Call on Thursday, November 7, 2024, at 2:30 p.m. PT/5:30 p.m. ET

ALHAMBRA, Calif., Nov. 7, 2024 /PRNewswire/ -- Astrana Health, Inc. ("Astrana," and together with its subsidiaries and affiliated entities, the "Company") (NASDAQ:ASTH), a leading provider-centric, technology-powered healthcare company enabling providers to deliver accessible, high-quality, and high-value care to all, today announced its consolidated financial results for the third quarter ended September 30, 2024.

"Astrana's strong third quarter continues to reflect the outcomes we are driving with the Astrana care model and value-based care enablement platform. We continued to see strong organic and inorganic growth across our businesses while delivering high-quality care and managing costs effectively in the quarter. We are confident in our platform's ability to continue improving access, quality, and coordination of care for around 1.1 million patients in local communities nationwide," said President and CEO of Astrana, Brandon K. Sim.

Financial Highlights for three months ended September 30, 2024:

All comparisons are to the three months ended September 30, 2023 unless otherwise stated.

Total revenue of $478.7 million, up 37% from $348.2 million

Care Partners revenue of $455.8 million, up 42% from $320.9 million

Net income attributable to Astrana of $16.1 million, down 27% from $22.1 million

Earnings per share - diluted ("EPS - diluted") of $0.33, down 30% from $0.47

Adjusted EBITDA of $45.2 million, down 13% from $52.0 million

Financial Highlights for the nine months ended September 30, 2024:

All comparisons are to the nine months ended September 30, 2023 unless otherwise stated.

Total revenue of $1,369.3 million, up 32% from $1,033.6 million

Care Partners revenue of $1,301.4 million, up 36% from $957.3 million

Net income attributable to Astrana of $50.1 million, up 4% from $48.4 million

Earnings per share - diluted ("EPS - diluted") of $1.04, up 1% from $1.03

Adjusted EBITDA of $135.3 million, up 15% from $117.6 million

Recent Operating Highlights

On October 4, 2024, the Company closed the acquisition of all of the outstanding membership interest in Collaborative Health Systems, LLC ("CHS") and all of the outstanding equity interests in Golden Triangle Physician Alliance and Heritage Physician Networks for an aggregate purchase price of $37.5 million, subject to customary adjustments, plus earnout payments in an aggregate amount of up to $21.5 million.

Segment Results for three months ended September 30, 2024:

Three Months Ended September 30, 2024

(in thousands)

CarePartners

CareDelivery

CareEnablement

Other

IntersegmentElimination

CorporateCosts

ConsolidatedTotal

Total revenues

$

455,760

$

34,728

$

40,930

$

—

$

(52,708)

$

—

$

478,710

% change vs. prior year quarter

42

%

20

%

11

%

Cost of services

369,835

29,114

19,604

—

(13,335)

—

405,218

General and administrative(1)

47,139

6,971

15,012

—

(39,370)

15,315

45,067

Total expenses

416,974

36,085

34,616

—

(52,705)

15,315

450,285

Income (loss) from operations

$

38,786

$

(1,357)

$

6,314

$

—

$

(3)

(2)

$

(15,315)

$

28,425

% change vs. prior year quarter

(4)

%

31

%

(2)

%

(1)

Balance includes general and administrative expenses and depreciation and amortization.

(2)

Income from operations for the intersegment elimination represents rental income from segments renting from other segments. Rental income is presented within other income which is not presented in the table.

2024 Guidance:

As we adjust our full-year outlook to incorporate CHS's financial contribution, we are raising our revenue guidance and narrowing our net income attributable to Astrana, Adjusted EBITDA, and EPS guidance for the year ending December 31, 2024.

($ in millions, except per share amounts)

2024 Guidance Range

Low

High

Total revenue

$

1,950

$

2,030

Net income attributable to Astrana Health, Inc.

$

52

$

58

Adjusted EBITDA

$

165

$

175

EPS, diluted

$

1.06

$

1.19

See "Guidance Reconciliation of Net Income to EBITDA and Adjusted EBITDA" and "Use of Non-GAAP Financial Measures" below for additional information. There can be no assurance that actual amounts will not be materially higher or lower than these expectations. See "Forward-Looking Statements" below for additional information.

Conference Call and Webcast Information:

Astrana will host a conference call at 2:30 p.m. PT/5:30 p.m. ET today (Thursday, November 7, 2024), during which management will discuss the results of the third quarter ended September 30, 2024. To participate in the conference call, please use the following dial-in numbers about 5 minutes prior to the scheduled conference call time:

U.S. & Canada (Toll-Free):       +1 (888) 272-8703International (Toll):                   +1 (713) 481-1320

The conference call can also be accessed via webcast at: https://event.choruscall.com/mediaframe/webcast.html?webcastid=qeu83NWd

An accompanying slide presentation will be available in PDF format on the "IR Calendar" page of the Company's website (https://ir.astranahealth.com/news-events/ir-calendar) after issuance of the earnings release and will be furnished as an exhibit to Astrana's current report on Form 8-K to be filed with the SEC, accessible at www.sec.gov.

Those who are unable to attend the live conference call may access the recording at the above webcast link, which will be made available shortly after the conclusion of the call.

Note About Consolidated Entities

The Company consolidates entities in which it has a controlling financial interest. The Company consolidates subsidiaries in which it holds, directly or indirectly, more than 50% of the voting rights, and variable interest entities ("VIEs") in which the Company is the primary beneficiary. Noncontrolling interests represent third party equity ownership interests in the Company's consolidated entities (including certain VIEs). The amount of net income attributable to noncontrolling interests is disclosed in the Company's consolidated statements of income.

Note About Stockholders' Equity, Certain Treasury Stock and Earnings Per Share

As of the date of this press release, 41,048 holdback shares have not been issued to certain former shareholders of the Company's subsidiary, Astrana Health Management, Inc. ("AHM"), formerly known as Network Medical Management, Inc., who were AHM shareholders at the time of closing of the merger, as they have yet to submit properly completed letters of transmittal to Astrana in order to receive their pro rata portion of Astrana's common stock and warrants as contemplated under that certain Agreement and Plan of Merger, dated December 21, 2016, among Astrana, AHM, Apollo Acquisition Corp. ("Merger Subsidiary") and Kenneth Sim, M.D., as amended, pursuant to which Merger Subsidiary merged with and into AHM, with AHM as the surviving corporation. Pending such receipt, such former AHM shareholders have the right to receive, without interest, their pro rata share of dividends or distributions with a record date after the effectiveness of the merger. The Company's consolidated financial statements have treated such shares of common stock as outstanding, given the receipt of the letter of transmittal is considered perfunctory and Astrana is legally obligated to issue these shares in connection with the merger.

Shares of Astrana's common stock owned by Allied Physicians of California, a Professional Medical Corporation ("APC"), a VIE of the Company, are legally issued and outstanding but excluded from shares of common stock outstanding in the Company's consolidated financial statements, as such shares are treated as treasury shares for accounting purposes. Such shares, therefore, are not included in the number of shares of common stock outstanding used to calculate the Company's earnings per share.

About Astrana Health,  Inc.

Astrana is a leading physician-centric, technology-powered, risk-bearing healthcare management company. Leveraging its proprietary population health management and healthcare delivery platform, Astrana operates an integrated, value-based healthcare model, which aims to empower the providers in its network to deliver the highest quality of care to its patients in a cost-effective manner. Together with our affiliated physician groups and consolidated entities, we provide coordinated outcomes-based medical care in a cost-effective manner.

Headquartered in Alhambra, California, Astrana serves over 12,000 providers and approximately 1.1 million patients in value-based care arrangements. Its subsidiaries and affiliates include management services organizations (MSOs), a network of risk-bearing organizations ("RBOs") that encompasses independent practice associations ("IPAs"), accountable care organizations ("ACOs"), and state-specific entities such as Restricted Knox-Keene licensed health plans in California, and care delivery entities across primary, multi-specialty, and ancillary care. For more information, please visit www.astranahealth.com.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, such as statements about the Company's guidance for the year ending December 31, 2024, ability to meet operational goals, ability to meet expectations in deployment of care coordination and management capabilities, ability to decrease cost of care while improving quality and outcomes, ability to deliver sustainable revenue and EBITDA growth as well as long-term value, ability to respond to the changing environment, and successful implementation of strategic growth plans, acquisition strategy, and merger integration efforts. Forward-looking statements reflect current views with respect to future events and financial performance and therefore cannot be guaranteed. Such statements are based on the current expectations and certain assumptions of the Company's management, and some or all of such expectations and assumptions may not materialize or may vary significantly from actual results. Actual results may also vary materially from forward-looking statements due to risks, uncertainties and other factors, known and unknown, including the risk factors described from time to time in the Company's reports filed or furnished with the Securities and Exchange Commission, including, without limitation the risk factors discussed in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, and any subsequent quarterly reports on Form 10-Q.

FOR MORE INFORMATION, PLEASE CONTACT:

Investor Relations(626)

ASTRANA HEALTH, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

September 30,2024

December 31,2023

(Unaudited)

Assets

Current assets

Cash and cash equivalents

$

347,994

$

293,807

Investment in marketable securities

2,354

2,498

Receivables, net

132,237

76,780

Receivables, net, related parties

76,568

58,980

Income taxes receivable

16,211

10,657

Other receivables

1,120

1,335

Prepaid expenses and other current assets

20,506

17,450

Total current assets

596,990

461,507

Non-current assets

Land, property and equipment, net

12,172

7,171

Intangible assets, net

109,108

71,648

Goodwill

409,711

278,831

Income taxes receivable

15,943